This week's blogpost - https://bahnsen.co/42rcKV3 Often, we are our own worst enemies.  To grow/mature as an investor, it is helpful to watch game film to slow down, reflect, and understand how things played out last year.  Please join me as I unpack why the markets in 2023 were a lot like fishing.  I will also conclude with some guidance on why (1) constantly refining your process and (2) controlling your emotions are such a key to long-term wealth accumulation.     Links mentioned in this episode: http://thoughtsonmoney.com http://thebahnsengroup.com

This week's blogpost - https://bahnsen.co/429YLTH What is Risk? Seems like quite a philosophical question, no?  Yet, one we must wrestle with when it comes to investing.  A misunderstanding of risk can be costly.   Blaine Carver uses this analogy, and I think it’s perfect: We need to adjust our financial binoculars. We need to focus less on the blurred foreground and more on the horizon. The short-term gyrations in the market are anything but clear. But focusing on the horizon (10, 20, 30 years from now) allows us to look past the blurry foreground. With that said, please do come join us – binoculars in hand – for Blaine’s Thoughts On Money. Links mentioned in this episode: http://thoughtsonmoney.com http://thebahnsengroup.com

This week's blogpost - https://bahnsen.co/3RXvTZY The temptation to overcomplicate wealth management in the name of sophistication is strong. Financial advisors are especially prone to fall into this category as we seek to add value to our clients. I encourage our readers to focus on the north star, not to be pulled away by the clever gimmicks that pop up every year, and to exercise discipline in our process. I encourage our readers to build wealth that withstands the test of time so that many generations can benefit from the strong foundation you have created. James Andrews Private Wealth Advisor jandrews@thebahnsengroup.com Trevor Cummings PWA Group Director, Partner tcummings@thebahnsengroup.com Links mentioned in this episode: http://thoughtsonmoney.com http://thebahnsengroup.com

This week's blogpost - https://bahnsen.co/3tDVijt Last week, we discussed the short life spans of New Year’s Resolutions. Blaine Carver offered some simple and profound wisdom around setting goals first by defining WHO you aspire to be prior to defining WHAT specifically you plan to do. This is a great segue for our dialogue today on what are the key attributes and/or traits of a successful investor? This question gets me to an article for you on WHO you should aspire to be as an investor. I hope you will find this article to be thought-provoking, impactful, and, most importantly, applicable. Links mentioned in this episode: http://thoughtsonmoney.com http://thebahnsengroup.com

This week's blogpost - https://bahnsen.co/3H0IPt9 Today Blaine Carver shares his Thoughts On Money. We know that gyms and juice bars will be as busy as ever in January; why? New Year’s Resolutions!  Yet, come February those trends tend to normalize as resolutions are ditched and old habits return.      Some of us have become disenchanted with these resolutions because we know historically these commitments fade and fail.  I’d encourage you to dive into Blaine’s article today, as he will share more on how to frame these goals in a manner where you will stick to them and you will achieve those aspired resolutions.   Links mentioned in this episode: http://thoughtsonmoney.com http://thebahnsengroup.com

This week's blogpost - https://bahnsen.co/3RBuYOT Yoda tells the young Jedi, Luke Skywalker, “Once you start down the dark path, forever will it dominate your destiny.”  I can’t think of a better piece of wisdom for investors, both young and old.  When you start to be drawn in by the seductive results of unsustainable returns, you have set a course to the dark side, a path to financial ruin.  Join me today for my Thoughts On Money as I further unpack this concept and how a lifetime of ordinary returns will compound to produce life-changing results. Links mentioned in this episode: http://thoughtsonmoney.com http://thebahnsengroup.com

This week's blogpost - https://bahnsen.co/47WPz7e Today we welcome back James Andrews to share his Thoughts On Money. I won’t spoil it, but the opening story alone is worth a read. James goes on to talk about decision making and the importance of thinking beyond just the initial benefits or consequences.  Whether it is a rippling pond or a tipped over domino, we get this idea that one decision can set off a chain reaction of other intended or unintended outcomes.  Links mentioned in this episode: http://thoughtsonmoney.com http://thebahnsengroup.com

This week's blogpost - https://bahnsen.co/3sZxIgP Today we will discuss the importance of understanding the why behind the what.  Too many financial decisions are made in a manner where the action gets more attention than the intent.  Understanding the why is one of the keys to financial success.  To unpack this truth I will share some funny stories, including one from my childhood – you won’t want to miss it.  Please do join me today for my Thoughts on Money.  Links mentioned in this episode: http://thoughtsonmoney.com http://thebahnsengroup.com

This week's blogpost - https://bahnsen.co/49XwxPv Imagine trying to build a 1,000 piece puzzle without the box cover – nearly impossible, right? Today, Blaine Carver unpacks this analogy of coverless puzzles and aimless financial plans. Words of wisdom that are pertinent for investors both young and old. Links mentioned in this episode: http://thoughtsonmoney.com http://thebahnsengroup.com

This week's blogpost - https://bahnsen.co/47gGZj8 Growing up, it’s normal to dream about your future. As we grow up, our career aspirations shift, morph, and evolve. Perhaps in 3rd grade, you dreamed of being an astronaut. By 5th grade, you settled on being a pro baseball player, and by college, you find yourself two years into an art history major when your dad nudges you to pivot to something more practical. In these years of maturation, it is totally normal and probably healthy to leave your options and dreams open. Yet, at some point, setting a direction and sticking to that direction is important. A good friend of mine was having trouble with this concept. He had tried a number of different career paths and found himself in constant flux. Each path lasted about 18 months, and then he’d shift, restart, and head in a new direction. This can be a tiring endeavor – both for my friend and for his loved ones who were walking alongside him on this journey. Here was my advice – stick to something, anything. I told him that he wasn’t getting through the learning curve stage of any career, and he wasn’t benefiting from the momentum that one gets when one sticks to something. Time in the chair is meaningful, and you pick up a lot along the way – whether as a plumber or a lawyer – and that tribal knowledge is valuable. Links mentioned in this episode: http://thoughtsonmoney.com http://thebahnsengroup.com

This week's blogpost - https://bahnsen.co/3MAS2vx Today, we welcome back guest author James Andrews. Also, please remember to join us for the podcast where we riff on the article and offer some extra insights on the topic. I especially enjoyed James’ section today on what he calls unforced errors and the unnecessary detriment these missteps can cause to investors. I am sure you will enjoy this and much more, so please join us today for James Andrews’ Thoughts On Money. Links mentioned in this episode: http://thoughtsonmoney.com http://thebahnsengroup.com

This week's blogpost - Have you ever attended a walk for breast cancer? Or perhaps a fundraiser for Alzheimer’s research? A discussion with almost any attendee will lead to a conversation about how this disease or cause hits close to home for them. Whether it’s their own battle or that of a loved one, you can connect the dots from their passion to their support. Our experiences can drive our beliefs and behaviors. Last week my wife got in a car accident. I’ll be upfront, it was a fender bender, and everyone is okay. Regardless, it still hit close to home. We were hosting some guests from out of town. My wife took a few of them to Target for some shopping. I was at work. My kiddos were being a handful, so she decided to drive around the parking lot while waiting for our guests to wrap up. A few screaming kids, a not-so-obvious stop sign, and an opposing teenage driver led to about $4,000 of damage to our minivan. Perhaps an overused term here on TOM, but this experience was and is game film; actual footage of the collision (pun intended) of life and financial planning. So, just as we would with game film, let’s review what happened and four learnings we can glean from my experience last week. Links mentioned in this episode: http://thoughtsonmoney.com http://thebahnsengroup.com

This week's blogpost - https://bahnsen.co/498rCeb We all have flaws. All of us. The problem is that not all of us are aware of our flaws. We are hyper aware of the flaws of those around us, but often blind to our own blemishes. As the Ancient Greek maxim states, “Know thyself.” This is of course not news to you – I am well aware of that. I know that you know that we all have our own flaws. Here’s what I’d like to discuss today though, are we (1) aware of our personal blemishes? and (2) do we have a plan for addressing those shortcomings? Links mentioned in this episode: http://thoughtsonmoney.com http://thebahnsengroup.com

This week's blogpost - https://bahnsen.co/49dCWWz Last week we had an incredible guest author, Blaine Carver.  To continue the trend, we are now welcoming in James Andrews as this week's guest author on Thoughts On Money.  James starts us off with a story of sleep training that all parents can relate to and then dives into a teaching on mental models.  James takes us on a journey around financial decision-making and helps equip our readers to improve their own decision-making skills.  I hope you will join us both for the written and audio (podcast) of this week's Thoughts On Money.  Links mentioned in this episode: http://thoughtsonmoney.com http://thebahnsengroup.com

This week's blogpost - https://bahnsen.co/3ZWJHYy I am excited and honored to introduce a guest writer today on Thoughts On Money. My good friend and colleague, Blain Carver, has prepared a wonderful entry for us today. We will talk road trips, finances, emotions, and the intersection of all of the above. Please join us for the written and the accompanying podcast – you won’t want to miss it. Links mentioned in this episode: http://thoughtsonmoney.com http://thebahnsengroup.com

This week's blogpost - https://bahnsen.co/3RGuE2U Before I gave financial advice, I pedaled bikes.  Today, we will discuss the intersection of BMX racing and investing.  Specifically, we will unpack how to measure results and some of the common pitfalls result-driven investors and athletes face.  I am sure you will enjoy a stroll down my memory lane and the opportunity to grow as investors.  So, without further ado, I present Results Driven.  Links mentioned in this episode: http://thoughtsonmoney.com http://thebahnsengroup.com

This week's blogpost - https://bahnsen.co/3ZyGe1P Have you ever been scammed? Since the birth of the internet, we the American people, have become quite familiar with scams. We now know to delete any proposal for a financial exchange coming from a Nigerian prince. We dodge these scamming attempts daily. Yet, these scams are still in high production. Why? Unfortunately, because they still work; people are still being duped daily. These scams try to lure you in with a request for a small commitment in exchange for a big reward. Maybe a better way to say this, people are tempted by the opportunity to get something for nothing. Links mentioned in this episode: http://thoughtsonmoney.com http://thebahnsengroup.com

This week's blogpost - https://bahnsen.co/467qQf8 I am guessing that most of us reading this article have moved at least once or twice in our lifetime. For me, I’ve moved four times over the last ten years. I’ve become familiar with this feeling I get, that tinge of anxiety as I’m preparing for or staring down the barrel of a move. The organizing, the packing, the lifting, the loading, the unloading, the unpacking, etc. It’s a big undertaking. I will say this, though, I’ve definitely matured as a mover. Good labeling and a solid process go a long way. This whole operation reminds me a lot of financial planning. Links mentioned in this episode: http://thoughtsonmoney.com http://thebahnsengroup.com

This week's blogpost - https://bahnsen.co/44yuUnl Do you ever notice those habitual lane-changers in traffic?  There is a lot of activity going on, but they make little progress.  There doesn’t seem to be a correlation between how many times you switch lanes and a reduction in your drive time.  Often you will observe “lane change regret.”  The driver sees opportunity, so they get over, only to then realize that their former lane is now taking off. Investors today are trying to change lanes in traffic, and they will inevitably experience lane change regret.  How do I know this? Because investors on average – myself included – are horrible at trying to time markets and what we are talking about is exactly that, market timing. The peaks and troughs of markets are driven by extreme sentiment; peaking in irrational exuberance or greed and reaching a trough at levels of excessive fear.  Lane-changers aren’t enticed back into markets at the troughs, yet it is a fear that lures them back in, a fear of missing out (FOMO).  This FOMO, or point of capitulation, tends to come after a rise or rally in markets, which is often an expensive re-entry point. Links mentioned in this episode: http://thoughtsonmoney.com http://thebahnsengroup.com

This week's blogpost - https://bahnsen.co/3OHt2Ti Legacy. Leaving a legacy. Your legacy. What a loaded finance word, right? We know it has depth and meaning, but we don’t always really know what it looks like practically. Join me as I walk through a real life story of legacy and share some practical steps for how you can leave a legacy.   Links mentioned in this episode: http://thoughtsonmoney.com http://thebahnsengroup.com

This week's blogpost - https://bahnsen.co/3QDVM25 Suppose I wrote two different articles – one on how to improve investment returns and another on how to reduce your tax bill.  Which article would you be most likely to read?  Regardless of your answer, I think you will enjoy today’s discussion on Thoughts On Money.  We will dive into ideas for improving investment returns by looking for opportunities to reduce your tax bill.  Please join me as I bring some life to the topic of taxes and provide you with some basic real-life applications.  Links mentioned in this episode: http://thoughtsonmoney.com http://thebahnsengroup.com

This week's blogpost - https://bahnsen.co/47jPdrg Thank you for your faithful readership of Thoughts On Money. You and I, we are in this together. As iron sharpens iron, So one person sharpens another. Links mentioned in this episode: http://thoughtsonmoney.com http://thebahnsengroup.com

This week's blogpost - https://bahnsen.co/44LNvxf We understand this idea of flourishing as individuals, but even furthermore in a corporate sense. Flourishing as a church community or flourishing alongside your colleagues in business, or flourishing as a family. This is an even deeper aspiration that we would prosper in and with our community. Yet, flourishing isn’t how all of us would describe our life and current status. So, what’s missing? If flourishing is the goal, what is the path to get there? I can’t claim to be able to pave that whole path in this article, but I do want to submit one key thought/idea for you to meditate on. Links mentioned in this episode: http://thoughtsonmoney.com http://thebahnsengroup.com

This week's blogpost - https://bahnsen.co/3Q8lStI I was filling in for David Bahnsen this week on DC Today, and I was reminded how much I enjoy the Ask David section. This is where readers send in questions, and David addresses one question a day on this published public platform. I remember an old teacher always used to encourage our class, “Ask, please ask all the questions you have. If you have a question on your mind, surely that same question is on the mind of a few others.” It was our civic duty to ask questions; it was for the greater good of the class. Our teacher actually used to give us [the class] an ultimatum – either ask questions for the entire period of the class, or he’d tee up a boring lecture. That’s right, an entire class, an entire semester, of just our questions. Sounds odd, right? But this professor knew the subject well, and our inquiries were based on the assigned reading, so it was our actual questions that made up the tapestry of his lecture. Yet, because we were the inquirers, we were much more engaged. Participation was a large portion of your grade, so it was also a motivator to complete the daily reading and be prepared for the discussion. It was quite a genius approach to teaching. In that vein, I should probably be better about sharing the questions that I get from clients, friends, and readers. Why? Because surely these questions are on the minds of many others. Links mentioned in this episode: http://thoughtsonmoney.com http://thebahnsengroup.com

This week's blogpost - https://bahnsen.co/3DdMjXk Today’s discussion was a lecture I was giving myself. Is there a place of vulnerability in my financial plan that needs to be addressed? Maybe your plan has some vulnerabilities and gaps, too. I encourage you to get a second pair of eyes on your plan and make sure everything is buttoned up and tidy. Why? Because everything can change in a moment. Links mentioned in this episode: http://thoughtsonmoney.com http://thebahnsengroup.com

This week's blogpost - https://bahnsen.co/3JLysv2 The Choice is Yours I recently watched the movie Race, the story of Olympian Jesse Owens. One particular scene stood out to me. Coach Larry Snyder is advising Owens on life/relationship decisions, and he warns, “The choices you’re making right now won’t even feel like choices until it’s too late.” I couldn’t shake that statement. The truth of it haunted me a bit. Whether we realize it or not, the micro-decisions we make today will have an impact on our future. Yet, the size of that impact can only be measured and realized in hindsight. Helping or Hindering These thoughts came on the heels of a discussion that Sean Latimer and I had on last week’s podcast about 529 plans. We wrestled with the reality that each of us – in one sense or another – struggled to pay our way through college and we both wanted to spare our kids from that same struggle. We wondered whether these 529 plans would be hindering or helping. Was it, in fact, these very struggles that built our character and work ethic? Where would we be today if we were eased from those struggles? As a parent, these are weighty decisions. Whether your kids are toddlers or young adults, or even nearing retirement themselves, you have to be conscious about how you teach them about money and how you help them with money. Why? Because “The choices you’re making right now won’t even feel like choices until it’s too late.” Links mentioned in this episode: http://thoughtsonmoney.com http://thebahnsengroup.com

This week's blogpost - https://bahnsen.co/3CVMVkh For me, it was working full-time and attending class in the evening.     I saw the burden student debt had on many of my peers, so I chose to pay-as-I-go.  Cost and availability of evening classes definitely filtered down my options for college.     Today, I want to discuss how you can expand those education options for future generations with good planning and one particular strategy.   I hope you will join us as I provide a little more background on my own experience and dive deeper into some planning ideas.   Links mentioned in this episode: http://thoughtsonmoney.com http://thebahnsengroup.com

This week's blogpost - https://bahnsen.co/3qJPIu7 Don’t get me started on medical billing; we’ve got history.   In all seriousness, the whole healthcare system has been a major frustration of mine for years. As a single guy, I never had to interact much with my health coverage – I rarely went to the doctor. With getting married and starting a family, much of this changed.   Today I will discuss how I morphed these frustrations into a financial planning solution.  My hope is that by sharing my approach and process, it will help to sharpen your planning mind as well.  Links mentioned in this episode: http://thoughtsonmoney.com http://thebahnsengroup.com

This week's blogpost - https://bahnsen.co/3NlwmE8 Making pizza is all about timing. Do you know what else is all about timing? Roth conversions. Yup, just as the title alluded to, today we are discussing pizza dough and Roth conversions. Links mentioned in this episode: http://thoughtsonmoney.com http://thebahnsengroup.com

This week's blogpost - https://bahnsen.co/45WjDzp In sports, a fair-weather fan is a term for fans who only show up when their teams perform well. We also have a term for fans that rotate their allegiance based on which team is winning and, in vogue, a bandwagon fan While you have to respect those whose fanhood runs deeper than the current performance of their beloved team, born out of loyalty to one's family heritage or hometown, however, your investment strategy must have deeper intellectual roots, and your commitment to that strategy can’t be “fair weather,” and it can’t be “bandwagon.” Links mentioned in this episode: http://thoughtsonmoney.com http://thebahnsengroup.com

This week's blogpost - https://bahnsen.co/3BX4Fve The financial planning industry is obsessed with talking about (1) you not outliving your nest egg and (2) the proper planning on bequeathing your wealth. Yet, there is very little discussion about how one would enjoy their legacy during their lifetime. Today, we will discuss the reality of future financial leftovers and the importance of planning for those leftovers now. We will talk about the process of breaking your financial plan, setting dream goals, and much more. Links mentioned in this episode: http://thoughtsonmoney.com http://thebahnsengroup.com

This week's blogpost - https://bahnsen.co/3MILA6a From my vantage point, a lot of investors are sitting on their hands right now.  There seems to be a hesitation to buy real estate, stocks, and any other risk assets.  Everyone is in a sit-and-wait posture.  I believe much of this is driven by fear, a fear that can be paralyzing for many.  Yet, your financial goals do not sit-and-wait. They are dependent on prudent financial decisions and actions.  Please join me as we unpack this further in today’s Thoughts On Money.  Links mentioned in this episode: http://thoughtsonmoney.com http://thebahnsengroup.com

This week's blogpost - https://bahnsen.co/3Vy7trq Please join me today for a few fun stories. You will learn about the number one rule in our house growing up and how I absolutely butchered the catering order for my son's 1st birthday. As I typically do, these stories will bring us back to financial planning. I will explain why accurately estimating your expenses may be the most important component of your financial plan. Additionally, I will walk you through some practical steps for how you can keep a pulse on your actual spending. All of this and much more in today’s Thoughts On Money… Links mentioned in this episode: http://thoughtsonmoney.com http://thebahnsengroup.com

This week's blogpost - https://bahnsen.co/3oDKHlx I’m not sure if this is a cultural phenomenon or just how we are wired as humans, but I see so many people agonize and dwell on the minors while ignoring the majors. You can’t stop thinking about that nick on your new car, your teenage daughter can’t stop looking at that pimple in the mirror, your husband can’t stop complaining about that slightly crooked outlet in your home. We tend to obsess over the small (the minor) while failing to focus or even recognize the whole (the major). We even have an idiom in the English language to express this: missing the forest for the trees. And we bring this very paradigm to our finances. I see it all the time. Investors get tunnel vision on an investment or a planning item that has very little impact on their whole portfolio or plan. The energy, the emotions, and the time that gets committed to these obsessions are never commensurate with the attribution or impact. Links mentioned in this episode: http://thoughtsonmoney.com http://thebahnsengroup.com

This week's blogpost - This may seem silly, but I do believe it’s important for you to be aware of who you are, how you operate, and what type of financial environment suits you best. Sure, we could poke fun at smaller plate sizes or coloring books during lesson time, but we also have to realize that our success will depend on these types of strategies and approaches that help protect us from our most common financial obstacles. For me, the art of earmarking is such a key component of my own financial plan. I’d actually argue that it’s often these types of concepts or habits that yield the most meaningful results. Sure, you are most interested in the complex tax strategies or the intellectually stimulating investment approaches, but in the end, it’s the simple blocking and tackling that differentiate financial success from the struggle. Give it a try. Make a list of what’s important to you - retirement, medical, charity, education, financial freedom, etc. Prioritize this list and see if you can begin to earmark and allocate your portfolio and income to match your priorities. Let me know how it goes… Links mentioned in this episode: http://thoughtsonmoney.com http://thebahnsengroup.com

This week's blogpost - https://bahnsen.co/415sGen One of the most difficult things for me when I quit competing as a cyclist was staying motivated to exercise. I quit competing when I was 20 and continued to work at a fitness center for the next five years, yet I had so much trouble finding the motivation to work out. There really should’ve been no excuses – I had a free gym membership, and I could’ve worked out before work, during lunch, after work, or really any time – the gym was open 24 hours. No excuses, yet I wasn’t inspired to stick to a workout regimen. It took hindsight to realize that (1) I always hated exercise and (2) I always loved winning my cycling competitions. That’s the thing, my desire to win outweighed my despise for exercise. When cycling was out of the picture, I just never could stick with working out. I tried all sorts of things – organized classes, fitness challenges, personal goals, personal trainers, and everything else you could imagine. There was a good life lesson here – strong desires and goals can fuel discipline and endurance. Just the way competitive cycling impacted my exercise routine. Do you know what reminds me a lot of exercise? Saving. It’s good for you and yields great benefits in the long run, but it takes sacrifice, and the results in the short run can be hard to notice. To be a good saver, you first need to establish a clear goal that will fuel that discipline and endurance I mentioned earlier. Links mentioned in this episode: http://thoughtsonmoney.com http://thebahnsengroup.com

This week's blogpost - https://bahnsen.co/3nOuUA2 Today we will revisit an article I wrote back in February of 2020, which seems like forever ago.   There is such a benefit to reflect on how we were thinking back then and how things played out over the next two years.     The original article was inspired by a conversation with a friend who abandoned his investment strategy.  I recently had the opportunity to speak with him and see how this change of course has impacted his portfolio over the last couple of years.    There are great lessons to glean from today’s discussion, Links mentioned in this episode: http://thoughtsonmoney.com http://thebahnsengroup.com

This week's blogpost - https://bahnsen.co/3luKIY5 Growing up, I had a lot of pets; my family loved animals. We had cats, we had dogs. We had snakes, we had lizards. We had turtles, we had rabbits. At one point, I think we may have had a chinchilla. When I was in kindergarten, we had a whippet, a dog breed that looked almost like a miniature greyhound. His name was Whip. Real clever, right? In high school, my mom ended up adopting/rescuing a chihuahua. This was around the same time as those Taco Bell commercials where the little chihuahua would say, “Yo quiero, Taco Bell,” so the timing was perfect – that little pup was a cultural icon. Thinking it wasn’t wise for this little guy to be alone (the justification of all pet owners who are seeking to grow their flock), we ended up adopting another chihuahua. Then the shelter needed homes for some of his other k9 siblings, and all of the sudden, we had four chihuahuas. That’s right, FOUR chihuahuas – ay caramba! My mom loved those four little mini dogs. They were feisty and full of energy. I remember when people would come to the door, they’d jump back in fear as they were startled by the rumbling barks, and then when they caught a glimpse at the profile of those 5-inch monsters making all that noise, they’d laugh. Little dogs, all bark, no bite. In honor of my late great furry little family members, I thought we could talk about chihuahua markets today. Now, hopefully, you aren’t getting a visual of some pet store where you can buy little dogs – this is not what I mean by chihuahua markets. I specifically mean those markets with all bark and no bite. Where the headlines and the anxious chatters (the barks) make your spine shiver, but the actual market prices end up right where they left off (no bite). Links mentioned in this episode: http://thoughtsonmoney.com http://thebahnsengroup.com

This week's blogpost - https://bahnsen.co/42mZeRZ I was at a tension point with what I wanted to discuss here on Thoughts On Money today; I was really feeling torn.  The newsfeed this week has been absolutely flooded with analysis, opinion, and speculation on the demise of Silicon Valley Bank (SVB).  What you don’t need is another opinion or perspective on what happened. Links mentioned in this episode: http://thoughtsonmoney.com http://thebahnsengroup.com

This week's blogpost - https://bahnsen.co/3T5kkjI I have a simple truth to present to you today – if it seems too good to be true, it’s probably too good to be true.  Please join me as we navigate the importance of investor maturity and how some financial products aren’t always as they seem.  I will take you in a time machine back to the start of my career, provide you with some shocking comparisons, and much more.  Links mentioned in this episode: http://thoughtsonmoney.com http://thebahnsengroup.com

Today's Post - https://bahnsen.co/3J91t3Q Today I want to discuss a very simple and actionable planning item – the interest rate you are earning on your cash. As we know, inflation and interest rates are spiking, yet still, the national average yield for savings accounts is less than 0.25%. Please join me as we dive right in and address what a saver is to do in these interesting times we are living in. Links mentioned in this episode: http://thoughtsonmoney.com http://thebahnsengroup.com

Last week I celebrated my birthday, and this week I got to enjoy one of my birthday gifts – Warriors tickets (NBA basketball). My in-laws sweetened this gift by also volunteering to watch our kids, so my wife and I could go together. The drive from home to the arena is modest in miles and daunting in drive time – LA traffic. I laugh in hindsight, but I was fumbling to find directions, as I kept asking Siri to pull up directions based on the old name of the arena. I’d ask to be navigated to “Staples Center” and Siri kept trying to direct me to the local Staples office supply store. I had forgotten that the name was changed at the end of 2021 to the “Crypto.com” arena (no comment). Eventually, I remembered the name change, was able to map out directions to our destination, and we enjoyed an evening of basketball – even though the Warriors lost 🙂 This is a very simple lesson, right? You need to know the name of your destination before you can map out directions. As you may have assumed, I have a personal finance parallel here, but let’s start with some background… Links mentioned in this episode: http://thoughtsonmoney.com http://thebahnsengroup.com

First, a false alarm (fire drill) interrupted a client conversation at the office.     Next, a false alarm woke me up from a dead sleep at home.     Today, we will discuss the importance of not mistaking false alarms for fires when it comes to investing.  A simple financial truth that I’d encourage you to heed.  Links mentioned in this episode: http://thoughtsonmoney.com http://thebahnsengroup.com

Today, I’d like to address a financial misconception that’s running rampant right now in the world of personal finance. Financial anxiety and economic uncertainty are spiking, and investors are speculating if we are in a recession, approaching a recession, or potentially avoiding a recession. This climate, and the overall general sentiment, have left many investors wanting to avoid risk assets like the plague. The beauty queen of the last 6 months or so has been the two-year treasury. I can’t tell you how many times I’ve heard investors tout that they’re selling risk assets and buying a two-year treasury or how they’re holding off on deploying new money into the stock market and buying a “two-year” until things “settle.” Now, if you don’t mind, I’d like to explain why I think the two-year treasury is fool’s gold. But, first, I need to provide some background on how I personally view the financial planning process. Links mentioned in this episode: http://thoughtsonmoney.com http://thebahnsengroup.com

Today I would like to address a very simple question: where do you go for advice A very straightforward inquiry but an important one nonetheless.  As it often is in personal finance, sometimes the simplest questions can be the most revealing and thought-provoking. To help illustrate what I’m referring to here, I’d like to start with a personal story that I’m sure some of you can relate to. Links mentioned in this episode: http://thoughtsonmoney.com http://thebahnsengroup.com

In the last week or so, I’ve fielded numerous calls that have all revolved around the same or similar questions.  An investor has some surplus savings they’ve earmarked to spend in the near future, and they are wondering where to park these funds.  I’ve found myself repeatedly cautioning people away from placing short-term monies into long-term investments.  This a good reminder for all of us regarding the importance of respecting time horizons.  Please join me while I unpack this crucial financial planning truth. Links mentioned in this episode: http://thoughtsonmoney.com http://thebahnsengroup.com

Each and every one of us needs A.A. (Awareness and Accountability). The path to successful investing relies on (1) educating ourselves to become aware of what good investor behavior looks like and (2) resourcing the right advice-giver to help hold us accountable to making good decisions. Links mentioned in this episode: http://thoughtsonmoney.com http://thebahnsengroup.com

As we wrap up 2022, what better time than now to reflect on our blessings and begin to meditate on our own financial objectives for the coming year. For some, prioritization will be key and candid conversations with their financial advisor on these matters will be important. For others, a reminder is needed that with wealth comes responsibility and an added level of complexity as we layer on the piece regarding legacy planning. For the Cummings household, we are feeling absolutely blessed by our growing family, and we are excited to celebrate Christmas with an added stocking on the mantel. I hope you and your family have a wonderful Christmas and take time to dwell on all the blessings that have been bestowed on you. Links mentioned in this episode: http://thoughtsonmoney.com http://thebahnsengroup.com

Today, I would like to answer the question that has no right answer. Sounds like a fun little exercise, right? I want you to take a moment and ponder this query: What is the single most important word in personal finance?  One’s answer to this question could evolve and morph over time.  Depending on your season of life or recent experiences, perhaps your answer changes.  For others, maybe the answer to this question is the same as yesterday, today, and tomorrow. Personal finance is… personal.  So, you’d expect a wide array of answers when addressing a question like this. Links mentioned in this episode: http://thoughtsonmoney.com http://thebahnsengroup.com

You know that friend, the one who always has a counterargument, an obscure factoid, or tidbit they throw out; the one who’s always looking for a drop-the-mic type moment – the devil’s advocate in all situations. Their comments always sound something like, “I read this article once…” or “This survey actually showed that…” or “Despite the common assumption…” The friend that has a hand full of these trump cards he or she is always ready to drop. I hope my friends aren’t reading this because they might tell you that I’m “that guy.” 🙂 Nonetheless, dealing with these folks can be quite exhausting, but you’ll often find their rebuttals are weak. They rely on a single data point that can typically be questionable or skewed. Often using a statistic in isolation without context or interpretation. Links mentioned in this episode: http://thoughtsonmoney.com http://thebahnsengroup.com

STOP!! DON’T DO IT!! You just had a conversation with your second cousin's husband over Thanksgiving dinner, and he gave you this “great” investment idea or financial advice.  His pitch was persuasive, and that finance class he took in college, along with his morning habit of reading the Wall Street Journal, makes him seem credible.  In all reality, that extra dose of tryptophan from your second helping of turkey doesn’t only make you sleepy, it also makes you susceptible to bad financial decisions. This is what happens around the Thanksgiving table.  We connect with friends and family we haven’t seen in ages, and we talk football and finances.  Some of us will be more vulnerable this year as maybe our portfolio (or football team) has been underperforming our expectations.  To combat these temptations to ready-fire-aim on a modification to your portfolio or plan, I wanted to walk you through the appropriate process. Some of you may be laughing about the manner I’ve set up today's discussion, but I’m telling you that these Turkey Time Temptations are real.  I’ve had a front-row seat to a lot of foolish financial activity, and in my postmortem, I come to find that it all started at the Thanksgiving dinner table. With that said, here’s the appropriate step-by-step process for introducing changes to your portfolio/plan: Links mentioned in this episode: http://thoughtsonmoney.com http://thebahnsengroup.com

End-of-year planning has officially begun. My days are filled with questions about tax loss harvesting, end-of-year retirement contributions, and a plethora of inquiries about Roth conversions. It’s always been my preference here on Thoughts On Money to tackle the “softer side” of financial planning, and I typically veer away from the more technical or nuanced topics. Primarily because these topics can be a bit of a snooze for the average reader, and my hope is that you would collaborate with your advisor/CPA/attorney for that type of personalized technical planning. My real aspiration as a personal finance writer is to teach you how to think. With that said, I’d like to talk about a more technical topic today – Roth conversions. I will keep us more focused on the why as opposed to the how, and we will dive into some of the considerations that I think are often forgotten or glazed over. Let’s start simple – what is a Roth conversion? Under the current tax code, an investor can elect to convert a portion or all of their traditional IRA (pre-tax monies) to a Roth IRA. Each dollar converted is considered taxable income, and the benefit is that the Roth account will then grow tax-free. Links mentioned in this episode: http://thoughtsonmoney.com http://thebahnsengroup.com

In the last few weeks, I have had more conversations about a recession – and what that would mean to markets – than I’ve ever had in my entire career. As I’ve mentioned before, I heard one pundit cleverly ascribe this as the most anticipated recession of all time. Links mentioned in this episode: http://thoughtsonmoney.com http://thebahnsengroup.com

This week on Thoughts On Money I would like to dive into a question a client recently asked me.  The question was focused around how an investor stays engaged in the daily happenings of markets without negatively impacting their posture as a long term investor.  Often the news of the day can be troubling, and sometimes the barrage of content can cause us to take our eyes off the prize – our long term goals.  So, please join me as I explain how parenting, surgery, and investing all have a lot in common, and I discuss the importance of informed precision.       Links mentioned in this episode: http://thoughtsonmoney.com http://thebahnsengroup.com

In 2004, Matthew Emmons would make one of the most memorable Olympic blunders in history.  I encourage you to join us for our discussion today on the importance of aiming at the right financial targets.  Come learn about Emmons's big miss and how you can avoid making the same mistake with your personal finances.  Links mentioned in this episode: http://thoughtsonmoney.com http://thebahnsengroup.com

September. Was. Ugly. The S&P 500 was down more than 9% in the month of September alone. Markets were dropping, and investors were stressing. When it comes to investing, we have a lot of metrics and measurements to analyze investments. We typically like to express these measurements in ratios – allowing us to compare one particular figure with another. Think return-on-investment or price-to-earnings ratios. Here’s a ratio you won’t find in your financial textbook: return on stress. As you might imagine, these markets have led to skyrocketing levels of stress for investors. Anxiety is peaking, as uncertainty seems to be at an all-time high. Yet, let me remind you that return-on-stress is always zero. Our anxiousness, our fears, and our stress do not add an ounce to our investment returns. It’s these very emotions that typically get us in trouble – I can’t begin to describe how much financial damage has been caused by poor investor behavior. Well, I was blessed with the opportunity to deliver the message at my church this last Sunday, and I think there were a few tidbits from this sermon that are applicable to investors and our discussion today. In my intro, I spoke about what fear and faith have in common, as they both deal with an undetermined future (h/t John Gordon). We either choose to fear what the future has in store for us (negative anticipation), or we choose hope/faith, believing that goodness lies ahead (positive anticipation). I went on to explain how faith is often misunderstood, and how our experiences can sometimes derail our faith. I explained that faith is not having clarity in the process, but rather having clarity in the outcome. Links mentioned in this episode: http://thoughtsonmoney.com http://thebahnsengroup.com

Kids are the best. They say the funniest things, and they don’t mind telling you exactly how they feel. They’ll give you the unvarnished truth, whether you want it or not. My four-year-old can get grumpy sometimes, as many four years olds can. It’s hard not to laugh when he gets upset, as he crosses his arms, puffs up his bottom lip, and gives a stomp and a humph. This sequence is usually followed by the declaration, “Daddy, I’m going to be upset forever.” He emphasizes the “forever” part, and with his toddler accent, he pronounces it “fo-evah!” In your head, you can recite that “fo-evah!” comment, along with the look you might imagine, and understand why I find this to be both adorable and humorous. What exactly is he doing? He’s doing what every preschooler does – he’s taking his current feeling and projecting it into perpetuity (for-lev-uh!). He’s doing what most investors do. Investors study and digest the environment around them and assume that whatever trends are in place now will continue into the future. Links mentioned in this episode: http://thoughtsonmoney.com http://thebahnsengroup.com

Here at The Bahnsen Group, our Founder and namesake for the firm, David Bahnsen, wrote a book outlining our primary investment strategy, The Case for Dividend Growth: Investing in a Post-Crisis World. This Dividend Growth portfolio, which we refer to as Core Dividend, is made up of approximately 30 individual businesses (stocks). This number of securities was not chosen at random, it is much like that of a golf bag holding 14 clubs. At 30 securities, our investment committee, and our team of analysts, can know each of these businesses intimately, AND we can enjoy most all of the benefits of diversification. Just like 1,000 clubs in our bag wouldn’t transform us into a golf Hall of Famer, more securities won’t continue to meaningfully reduce risk/volatility. The “why” is the important part here. When investing, we are facing two different types of risk – Business Risk and Market Risk. Business risks are the risks unique to that one particular business and how individual circumstances or events can uniquely impact that one business versus the entire industry or market. Perhaps a CEO is revealed for his or her scandalous activities, or a lawsuit comes forward against that business or financial troubles birthed from overspending and overborrowing. As a hypothetical, if one owns 25 individual stocks equally, this means the greatest concentration in one business is 4%. Sure, one should have other prudent risk management measures to diversify across industries and be aware of interest rates or commodity sensitivities prevalent in the businesses they own, but in general, this maximum concentration – in this example – of 4% is meant to diversify away from that individual business risk. If an unforeseen and unfortunate event occurs to one of those portfolio companies, even a 50% hit to the downside would only surface as a 2% drop to the portfolio – we call this attribution. Links mentioned in this episode: http://thoughtsonmoney.com http://thebahnsengroup.com

What’s For Dinner? Ok, let me set the scene… Your spouse, your significant other, your friend, your sibling, or someone close to you says, “Let’s go out to dinner tonight! Your choice, just say where…” For the next few minutes, you list off ideas one by one, and your counterpart shuts down each of them. Sometimes with a “Nah,” sometimes just a look of disgust, and sometimes with a “Didn’t we just go there?” Until you finally feel defeated and surrender with the response, “Where do you want to go?” In these situations – which I am sure some of us are very familiar with – we learn that an introductory promise of “your choice” really isn’t the case. Oh, I Would Never… In personal finance, I often experience a similar head fake. A client or potential client will introduce a conversation by telling me how foolish it would be to try and time the market, how market timing is an impossible endeavor – as I am shaking my head saying, “Yes, yes, that’s correct” – and then they proceed to tell me their plan. What’s their plan? To take a stab at some variation of market timing. It sounds like this: “I know market timing is a fool’s errand, and I know it’s impossible to know the future, but here’s what I’m thinking… There is so much unknown out there right now, I think I’ll wait until markets settle a bit” or “I’ll invest after markets pull back a bit” or “Until this geopolitical unrest is settled” or “Until this jobs report is published” or “Until this election is over.” How am I to respond? They know I don’t put any faith in being able to successfully time markets. Think about it, if I was a successful “timer” once, God knows I couldn’t do it again (be consistent), and if I could, I sure wouldn’t let anyone in on my secret. I’d just sail off into the sunset with my billion-dollar timing skills. Links mentioned in this episode: http://thoughtsonmoney.com http://thebahnsengroup.com

Today I want to talk about portfolio design. Specifically, I want to start with the basics; the foundational concepts of how one begins to build a portfolio. But first, let’s talk a little bit about road trips… Links mentioned in this episode: http://thoughtsonmoney.com http://thebahnsengroup.com

It was May 10th, 1996, when Twister hit the box office, a popular action-packed thriller that was the second highest-grossing film of the year.  This fictional flick sparked the popularity of “storm chasing” across the country. Fun Fact: Twister was the first film to be released on DVD in the US. Some twenty-six years later and the enamor for storm chasing has not faded.  A number of travel companies even specialize in storm chasing-led-adventure tours.   Throughout tornado alley, local news outlets highlight the collateral damage caused by storm chasers.  The influx of traffic and lack of local law enforcement – distracted by the tornado at hand – leads these chasers to blow through stop signs, run red lights, and drive distracted by their various weather devices, often resulting in fatal accidents. Rick Smith with the National Weather Service speaks out against these amateur chasers, "It is a serious situation in that anytime you have a severe storm, the storm itself is bad enough, and these storms can be very serious. It's important for people to know it's not like watching television it's not a video game. These storms can really hurt you, they can kill you, they can damage your vehicle," We are talking about ill-equipped amateurs seeking a thrill and relying on their limited experience and know-how to go out and "play" with tornadoes.  This is just downright foolish, no?  When it comes to weather, we call these folks storm chasers; when it comes to investing, we call these folks performance chasers. Today we will dive into the wild world of performance chasing and the financial wreckage this common pastime can cause. And off we go... Links mentioned in this episode: http://thoughtsonmoney.com http://thebahnsengroup.com

I’m writing today specifically to give you permission to transact. If you’ve met with your family and your financial advisor and you’ve collectively decided that it makes sense for your financial plan to acquire a new property - do it. If you’ve met with your family and your financial advisor and you’ve collectively decided that it makes sense for your financial plan to sell a property you currently own - do it. I’m seeing too much concern/anxiety out there about where real estate markets will go from here and how to best “time” one's next real estate transaction. I don’t see a lot of value in speculating or prognosticating about where your gut (or my gut) is telling us about the direction of real estate prices. My encouragement today will be on the importance of patience and how fear and greed typically cause the most damage. Note, the focal point for me today is more on one’s primary residence or second home. There is a different type of analysis when discussing investment properties. For investment properties, we’d most likely be juxtaposing multiple opportunities and concluding which poses the optimal risk/reward outcome. The acquisition or sale of a residence - your home specifically - will have more qualitative factors that need to be weighed, assessed, and considered. Links mentioned in this episode: http://thoughtsonmoney.com http://thebahnsengroup.com

A Practitioner's Perspective I know I’m not the smartest guy you’ll ever meet. And I know I don’t have a reputation or record of predicting macroeconomic events. So why listen to what I have to say?  Well, I have a distinctive vantage point as an advisor - as a practitioner versus an academic - who talks to investors all day long, every day.   I know what makes investors tick.  I advise folks to make wise financial decisions, and I know what fears and concerns are currently dominating their thought life.   Today we will discuss what I believe is the number one concern on most investors' minds, and I’ll explain why you really shouldn’t be worried.   But first, let’s talk about Winnie The Pooh….  Links mentioned in this episode: http://thoughtsonmoney.com http://thebahnsengroup.com

So, you’ve decided that you are going to purchase a new vehicle and you’ve narrowed your focus down to one particular make and model. You’ve even determined the color along with all the bells and whistles you’d like on this new gem. Then, you can’t help but notice your desired automobile everywhere – on the freeway, driveways in your neighborhood, the parking garage at work, etc. It “feels” like now that you’ve concluded your target buy that there has been a dramatic increase this week in the prevalence of this particular vehicle. You wonder… Did your neighbors go through the same process you are experiencing and just beat you to the punch at the car dealership? Is your community just one step ahead of you regarding this dramatic increase in your dream car? The answer is no. You are experiencing the Baader-Meinhof phenomenon (or frequency illusion). Your increased awareness is leading to a cognitive bias that this particular thing is more prevalent. One of those weird tricks our brains can play on us. Let me take this one step further, what is your actual fear? That you will lose your job? That you will outlive your nest egg? Again, the answer here could be different for all of us, but peeling back the layers is important. I’ve had many conversations recently where I have seen the fear of recession paralyze individuals from being able to design and execute aspects of their financial plan. The “what-if” enemy has people absolutely frozen in their tracks. By identifying and calling out your fear specifically you can measure and address this concern in your planning. Today, I thought it would be both appropriate and interesting to zoom in on some contrarian indicators. These are measuring sticks or alerts that may encourage us to stray from the herd. Links mentioned in this episode: http://thoughtsonmoney.com http://thebahnsengroup.com

On a few different occasions, over the last handful of weeks, I’ve had the pleasure of filling in for David Bahnsen on The DC Today. The format and style of these [The DC Today] writings are a lot different than what I am accustomed to. The focus is much more on current events, tidbits of all things markets, and politics happening around the world today. When asked to fill in, I was reluctant at first. If I am being honest, I was a little overwhelmed by the task, but in hindsight, I can say that I really enjoyed the opportunity. I also gained even more respect for David Bahnsen – if that is possible, based on my already high regard – knowing that he produces this content plus much, much more, day in and day out. In the end, I did find it enjoyable/fulfilling to help people cut through all the noise of the everyday news cycle and to package everything in an easy-to-digest recap of the day. This experience also made me meditate on the idea of how one goes about converting these tidbits of current events into application on the financial planning side. Yes, I know that not every news feed that comes across your desk will be or should be actionable, but I also know that if digested correctly, these small bits of information can be additive to your overall foundation of knowledge. And it is through this foundation that you derive your financial decisions and plans. Today, I thought it would be fun to hopscotch through David’s common DC Today headers and discuss how these current events can be viewed, assessed, and applied. The intent, as is often here on TOM, is to teach you how to think and to give you a sneak peek into the paradigm of a financial planner. So, off we go… Links mentioned in this episode: http://thoughtsonmoney.com http://thebahnsengroup.com

I love good questions. The type of questions that stop you in your tracks and really make you think. Not a cornering question nor combative one, but an inquisitive one that is birthed from the inquirer’s true curiosity. For me, this is how I learn – pulling on a particular topic thread to get a deeper understanding of the nuance. Sean Latimer is my most frequent co-host on the Thoughts On Money Podcast, a dear friend of mine, and a colleague here at The Bahnsen Group. Sean asked me on a recent podcast one of those GREAT questions that I am referring to. We were discussing the recent rise in interest rates and its impact on the stock and bond market. Sean asked me if the higher yields on bonds have changed my perspective on Expense Based Planning (EBP). EBP is a term I coined for my approach to portfolio design. You can find more on the topic here: The Madness of Methods. Links mentioned in this episode: http://thoughtsonmoney.com http://thebahnsengroup.com

Today I’d like to discuss interest rates, which have been a hot topic in markets. I want us all to understand both the basics of interest rates and how interrelated interest rates are to the markets at large. To me, Rube Goldberg’s art expresses both the complexity and chain reaction nature of interest rates, as well as the simple results/outcomes they produce. A home purchaser might see their mortgage rate as a simple cost function that determines their monthly payment (simple), but they might also now consider the impact that the Federal Reserve has on how that risk (their mortgage) was actually priced (complex). So, I invite you to join me on this journey through the wild world of interest rates. … and so, without further ado … Links mentioned in this episode: http://thoughtsonmoney.com http://thebahnsengroup.com

In the language of computers, you have a binary system made up entirely of zeros and ones. It took me a long time to realize that the language of financial planning is not binary. For a perfectionist, it is very hard to break out of the mode of complete optimization and maximization. As I’ve matured as a planner, I’ve learned how incredibly important the qualitative factors, the psychology, and the investor’s preferences are to the equation. Today, I’d like to dig into three examples of where we often get stuck thinking through financial decisions in a binary fashion – this or that. I’ll introduce the power of “hybrid” options and hopefully encourage you to expand your perspective when it comes to financial decision-making. Links mentioned in this episode: http://thoughtsonmoney.com http://thebahnsengroup.com

Last week I talked about one of our family traditions growing up – watching Jeopardy together. One of our other favorite pass times was and is, playing cribbage. Whenever we’d have friends over we’d teach them how to play so they could join in the fun. Cribbage isn’t go-fish, but it also isn’t bridge. All that to say, you could easily teach the basics of the game in 10 minutes. We always started with the key numbers you have to know if you are playing cribbage – 15 and 31. The game has lots of rules and nuance, but if you’re teaching a new play, you need to make sure they know the importance and relevance of 15 and 31. The rules of personal finance unfortunately cannot be taught and learned in 10 minutes. This is a craft that can be studied over a lifetime and perhaps never fully mastered. Just like cribbage though, I believe personal finance has some standout numbers and I’d like to discuss those today. Here’s an important differentiator though – cribbage is just a game. No matter how competitive, emotional, and animated you get about this game, it’s still just a game. Personal finance deals with your money, the money you toiled and sweat to acquire and accumulate. Your money and your financial plan are not a game. The seriousness and weight financial decisions and plans carry make this a very emotional endeavor. What I intend to elaborate on in today’s discussion is how these three key numbers help to build hope, security, and perspective; important emotional components to fuel a successful financial life. So, without further ado… Links mentioned in this episode: http://thoughtsonmoney.com http://thebahnsengroup.com

Today we will pick up part two of Hodgepodge and Potpourri. As you may recall from part one, watching Jeopardy was a family tradition growing up at my house.  Nostalgia has led me to borrow these popular Jeopardy categories - Hodgepodge and Potpourri - as an excuse for me to riff on a few unrelated finance topics that have caught my interest recently.  So, let’s jump right into it and pick up where we left off…  Links mentioned in this episode: http://thoughtsonmoney.com http://thebahnsengroup.com

I grew up watching Jeopardy with my family; it was a family tradition. I remember being amazed by how many answers my parents knew. Every so often, I’d sneak in with the right answer on a sports trivia category. This time together would eventually morph into family Trivial Pursuit (the board game) nights, where I’d team up with mom or dad versus one of my siblings. I remember as a young adult being over at a friend’s house and watching their family enjoy Jeopardy together too. My friend’s father had a good approach, he would record the episodes on his DVR and then pause the screen after each question to allow everyone time to think and then blurt out their answers. As I mentioned, I was partial to the sports categories. Although, I always thought it was quite humorous how specific and obscure some of the categories could be. I thought to myself, “Someone out there actually knows the answer to five different questions on 19th-century Danish Composers!?” (The answer is “yes,” and that person is Ken Jennings.) Then there was the inspiration for today’s discussion – Hodgepodge and Potpourri. These were the “catch all” categories where all the unrelated left-over questions could be housed together under one roof, one single header. There is no common thread that links the four topics (or curiosities) that I’d like to discuss. Each of these topics on its own does not warrant a dedicated article, so instead today we will take the potpourri approach. Here comes a hodgepodge of financial oddities that have piqued my interest. So, without further ado… Links mentioned in this episode: http://thoughtsonmoney.com http://thebahnsengroup.com

A recession is coming!!  Yikes! When?  Not sure.  How severe?  Couldn’t tell ya.  How long will it last?  Your guess is as good as mine.  When you have an event that is inevitable, but the severity and timing are impossible to know, what do you do? You prepare, you don’t prognosticate.  Think about it, we prepare for all sorts of things Mother Nature throws our way and preparing for a recession is similar.   Today we will talk about what being prepared for a recession looks like.  Links mentioned in this episode: http://thoughtsonmoney.com http://thebahnsengroup.com

Timing is… Everything. That’s right. Timing is EVERYTHING. When I proposed to my wife – perfect location, the right words, and… perfect timing. One of our favorite dinners to cook at home is barbecued tri-tip. The key to a great tri-tip? Timing. The right temp, knowing when to flip, how long to let it cook, and the amount of time to let it rest. Again, timing is everything. Getting that perfect start out of the gate as a swimmer or sprinter – timing. The key to comedy – timing. When to go in for that first kiss – timing. Investing isn’t immune to the impact of timing either. Timing is such a crucial part of what drives successful investment outcomes. Today we will explore four aspects of investment timing: Entry Points Holding Periods Measurement Time Frames Market Timing The intent of this discussion is to help all of us avoid some of the common timing mistakes and timing misconceptions that all investors face. So, without further ado… Links mentioned in this episode: http://thoughtsonmoney.com http://thebahnsengroup.com

A lot of my friends are real estate investors. They love it; they have a true passion for investing in real estate. Some flip homes for short-term profits and others are buy-and-hold long-term investors. Personally, I think sometimes this zeal and/or passion can distract one from realizing why they invest in real estate. In the past, when I’ve inquired, I would get answers like: “I love real property – you can see it, feel it, touch it – it’s tangible” Or “The leverage makes a big difference. The fact that I can put 25% or 30% down and the bank will cover the rest is amazing” Or “My parents bought this property for $75,000 originally, and now it’s worth north of $500,000 – it seems like real estate just always goes up” Yes, all of these beliefs and experiences do paint the picture of their affinity for investing in real estate, but I think people rarely articulate the REAL or primary reason. Humans hate uncertainty; people despise the fact that they don’t know what the future has in store for them. Investors also know that they will never really have the benefit of knowing the future, so they settle for the next best thing – something predictable and reliable, something they can count on. Links mentioned in this episode: http://thoughtsonmoney.com http://thebahnsengroup.com

When it comes to financial markets, many of us have these same particular dates seared into our brains: The Great Depression 1929. Black Monday, October 19, 1987. The Dot-Com Bubble of the late ‘90’s. The Financial Crisis of 2008. These are all memorable dates of when the stock market misbehaved. It wasn’t the entirety of the financial markets that took a beating during these events, but rather just the stock market. In 1929-1932 the stock market returns were such -8.30%, -25.12%, -43.84%, -8.64%. During those same years the US Treasury Bond returns were +4.20%, +4.54%, -2.56%, +8.79%. Here are some snips from USA Today on October 20, 1987 (the day after Black Monday): “As panicked investors scrambled to grab what money they had left, the Dow Jones industrial average spun into a dizzying free fall, losing 508.32 points to close at 1738.41 Monday. The Dow’s one-day loss of 22.6% destroyed the record set by the 12.8% plunge on Oct. 28, 1929, Black Monday… Yields on 30-year Treasury bonds fell Monday to 9.94%. But the bonds still are a relatively risk-free lure for investors frightened by the risk of stocks. Although the Fed always feels the pressure to keep rates down, West Germany and Japan have raised their interest rates, forcing USA rates up to remain competitive.” Links mentioned in this episode: http://thoughtsonmoney.com http://thebahnsengroup.com

I'll be upfront with you. I had reservations about tackling today's topic here on Thoughts On Money [TOM]. Why, you might ask? Because my goal in this communication is to translate complex financial topics into something palatable, understandable, and relatable. AND these topics - the Federal Reserve, interest rates, and the yield curve - are intimidating topics for me to try to translate. They almost feel too complex for translation. Some of this just begs for a general base of knowledge and the financial language needed to even participate in the conversation.    On the other hand, I absolutely couldn't help myself. I find these (the Federal Reserve, interest rates, and the yield curve) to be the most interesting topics in finance right now. I literally wake up every morning and look at the current treasury rates across all the different maturities - I study the yield curve and the day-to-day changes. Nerdy? Sure, but these interest rates permeate every corner of our financial markets; they matter a lot.   So… here are my encouragements. Write down the words you don't know and look them up. Listen to the accompanying podcast where Deiya Pernas and I walk you through these topics - you can literally listen in on our conversation about these very subjects. Lastly, you have my email (tcummings@thebahnsengroup.com). Please email me any questions, as I would welcome the opportunity to help bring more clarity around any of these matters that feel esoteric.    Links mentioned in this episode: http://thoughtsonmoney.com http://thebahnsengroup.com

There are different ways people deal with stress – some healthy, some not. Me? I like to organize. Yup, as weird as that sounds, when I’m stressed, sometimes organizing the junk drawer is my only source of relief. Something about just putting everything in its place gives me a little peace. A few years back, we installed some ceiling racks in the garage. Putting everything in storage bins and tucked away was true bliss. With that said, I do bring this same desire for order and organization to my personal finances. I value simplicity, cleanliness, and everything being where it should be. Opening a Donor Advised Fund (DAF) gave me a similar bliss to that of those ceiling racks. Yes, as nerdy as that sounds, getting our family’s giving organized brought me a lot of peace. I figured today we could discuss what a Donor Advised Fund is and some of the benefits my family has experienced from resourcing a DAF. Links mentioned in this episode: http://thoughtsonmoney.com http://thebahnsengroup.com

In keeping with the theme of the famed March Madness Tournament, today we are going to talk basketball, the evolution of the investment advice industry, and why you should seek out your own Dream Team. So, without further ado… Links mentioned in this episode: http://thoughtsonmoney.com http://thebahnsengroup.com

I want you to imagine that I have never heard of a casino. I have no idea what a casino is, and it is your job to explain it to me. So, you start by explaining that a casino is a business, a business made up of a collection of games, games of chance. These games pit the customer up against the casino and wagers are placed, a type of organized gambling. If you left the description there, you would have me scratching my head. Why? Because if these are games of chance and the customers compete with the casino, how do they stay in business? How do they make a profit? There is a very important detail that can’t be left out – each of these “games-of-chance” are slightly tilted in favor of the “house,” the casino. The probability, even if ever so slightly, favors the casino to win. Slightly favorable odds, multiplied by a high volume of customers and wagers, makes for a profitable business. Links mentioned in this episode: http://thoughtsonmoney.com http://thebahnsengroup.com

There's a question we’ve been getting multiple times a day recently:  I am concerned with everything going on in the world right now; don’t you think we should adjust my portfolio accordingly? I first want to say this is (1) a good question and (2) absolutely a valid question.  In life, when we feel threatened it is our natural instinct to react – to feel inclined to do something. Join us for today's Thoughts on Money, what we like to call, "TOM."  Links mentioned in this episode: http://thoughtsonmoney.com http://thebahnsengroup.com

I knew I wanted to be a financial advisor, but I just couldn’t figure out a way to get my foot in the door. There were not any job postings stating, “Looking for Financial Advisor, No Experience Required.” It was that chicken-or-egg problem, I needed the job to get the experience, and I needed the experience to get the job. So, I settled. I broadened my search from the specific role [financial advisor] to just getting a “resume builder” entry-level position within the finance industry. This is the backstory of why my career journey started in retail banking. Just being honest here, I despised working at the bank. As a banker, the incentives didn’t put the client’s interest first, and the incentives were designed based on an inaccurate assumption. Here’s my guess, at some point research was conducted that concluded that these banking customers who had more products with the bank had lower attrition rates. Another way of saying, a more engaged customer was more likely to stick around. So, an incentive plan was designed to get bankers to “sell more stuff” with the thought that this would be a profitable endeavor, both on the new product sales side and the customer retention side. Economics 101 tells us that incentives drive behavior – both good and bad – so a culture was born of bankers pitching superfluous products to clients who didn’t want, need, or even sometimes know they were sold these products. A practice that was antithetical to what you’d assume or desire from someone stewarding your finances. Although I look back at this experience with frustration and disbelief, the fact pattern does make sense to me. Leadership thought they were rolling out a strategy to drive profitability and retention. In the end, this was just a classic case of confusing correlation and causation. Links mentioned in this episode: http://thoughtsonmoney.com http://thebahnsengroup.com

As we get older, we acquire quite a robust library of life lessons. My life lessons tend to be accompanied by a vivid memory of when I first acquired each particular lesson/truth. For today's topic, I'd like to recall a memory from January 2020.   I was sitting in my office in Newport Beach, conducting a review meeting with a client that had been with our firm for less than a year. The meeting was chock-full of very engaging questions, and we were pushing the ball down the field on the first iteration of their financial plan. One of my colleagues dropped in to introduce themselves, and the three of us got into a discussion about this new Covid-19 virus. We tackled questions like, what impact would Covid-19 have on society? Our economy? The market? Our investment portfolios? And so on...   Again, this dialogue is one of those vivid memories I mentioned above. As we went around the table offering our opinions and forecasts, I remember comparing Covid-19 to the SARS virus and a former Ebola scare. I referred to the market's reactions to those events and offered a comparison that we could use to anchor our expectations. This dialogue wasn't just meant as banter, but the client wanted to know how they should react. I advised my client not to react and to stay the course of the current strategy and plan we had in place.   Links mentioned in this episode: http://thoughtsonmoney.com http://thebahnsengroup.com

To Sell, or Not To Sell, That is the Question...   I met with a few friends this week. It was a bit of an advice gathering, a meeting of the minds of sorts. They've owned a property for some time and were contemplating a sale. One of the primary objectives was just to relieve themselves of all of the general maintenance and the burden of being a landlord. The fact pattern made a lot of sense – they'd gleaned great benefits from this property over the years, and they were ready to pivot. Then the non-sequitur, "I don't know... with everything going on with the stock market lately, maybe we should just put this decision on hold for a bit."    Say What!?  The "stock market?" The tax impact should be a factor to consider. How this impacts their estate plan should be weighed and pondered. Finding the right buyer at the right price should be a priority. But the not the "stock market?"    The current real estate market has strong demand and what seems to be lighter than normal supply. These dynamics create bidding wars, and sellers benefit from some historical record-breaking sale prices.    BUT the TV screens are flashing red, and the anchors are talking about a struggling stock market in 2022. All of this with not even a month in the record books yet.    Links mentioned in this episode: http://thoughtsonmoney.com http://thebahnsengroup.com

Recruit Paul Revere. We need to make sure everyone knows. What’s all the fuss about? Well, one particular asset class – a popular one at that – had one of its worst years in 2021, and no one is talking about it. How in the world is this flying under the radar? Why are we not sounding the alarm? A bit dramatic? Of course, but hear me out. Links mentioned in this episode: http://thoughtsonmoney.com http://thebahnsengroup.com

Trevor and Deiya dive deep into the value and dangers of debt Links mentioned in this episode: http://thoughtsonmoney.com http://thebahnsengroup.com

It was the Summer of 2018 when Thoughts On Money was born. Brian Tong, Director of Strategy & Communications at The Bahnsen Group, was willing to entertain an idea I had for writing a weekly note on financial planning, what came to be affectionately known as “TOM.” Some three years later, and Brian (along with Glen Hall) has edited, published, and recorded about 150+ of these little TOM notes. As a reader of our content or a client, you begin to learn some of the names and faces of The Bahnsen Group. You may have a deeper, more familiar relationship with one or two of us, perhaps you’ve met another one or two in passing, and maybe you are aware of some of the others that make up this team. If you work at The Bahnsen Group, you know this more than a team; it’s a family. Now 35+ members make up this family, and there is a constant buzz and conversation across different departments and team members all striving for one goal – how to serve our clients better. Why this topic? Well, I think this is one of the more underappreciated areas of financial planning. We have a lot of folks that come to us because they want a trustworthy advice-giver to backfill them as the CFO of their household. We hear this a lot, “I just want to make sure my family is taken care of if anything was ever to happen to me.” This is a common desire, and resourcing an advisor is a positive step in the right direction to solve for this. Still, there are also some practical steps around organizing your financial documents and executing some estate matters that often get put on the back burner or forgotten. Today we discuss real-life experiences as a financial advisor and use these examples to reiterate the importance of organization and legacy planning, all from a practical application perspective. Links mentioned in this episode: http://thoughtsonmoney.com http://thebahnsengroup.com

In finance, inflation is this "not-enough" villain that's always hiding in the shadows. We are good at figuring out how much stuff we can buy today; that mental math is easy. BUT this idea that our money loses its potency over time makes it very hard for us to figure out what we can afford tomorrow.  We are all looking for practical ways to combat the fact that a dollar is a dollar today, just as it is tomorrow, but a dollar will buy less today than it did yesterday and even less tomorrow (that's a tongue twister). We are all in search of practical ways to hedge inflation.  Inflation is top of mind right now, and it's everywhere we look these days - from newspaper headlines to political speeches to the gas prices at the pump.  Links mentioned in this episode: http://thoughtsonmoney.com http://thebahnsengroup.com

Great Service There’s this old adage in customer service that says, “under-promise and over-deliver.” Why? Because so much of happiness, or contentment, is derived from outcomes – how things turn out – being better than what one may have expected. Imagine the opposite; how does it feel when someone overpromises and under-delivers? Frustrating, disappointing, annoying, arghh! And the list goes on. Just Like Last Time Our expectations are often rooted in our past experiences. As consumers, we appreciate consistency. We want that chicken sandwich to taste just like it did last time, and we anchor these expectations more heavily on our RECENT experiences. One of the most commonly referenced cognitive biases in behavioral finance is recency bias. This bias is our tendency as investors to lean more heavily on recent outcomes to guide future expectations. BUT past is NOT prologue, and herein lies the exact issue that we will address in today’s discussion: investor’s great [misplaced] expectations around future investment returns. http://thoughtsonmoney.com http://thebahnsengroup.com

Today on Thoughts On Money, I bring you another podcast interview with one of my colleagues at The Bahnsen Group, Kimberlee Davis. Kimberlee is a Managing Director, a Partner, The Fiscal Feminist, a Private Wealth Advisor, and she carries a myriad of other titles, roles, and accomplishments, both professionally and personally. What you don’t see on her business card or resume, though, is that Kimberlee is the proud mother of three and an engaged daughter who serves/cares for her parents. Kimberlee penned an article titled Blindsided By Being Sandwiched!, where she discusses her personal experience with her duties/responsibilities for caring for her aging parents AND simultaneously supporting/mothering her three young adult daughters. Kimberlee approaches the topic by sharing her journey and providing the perspective of a financial advice giver. This professional wisdom and her personal experience made her the ideal candidate to interview on this topic. This subject, the idea of “being sandwiched,” caring for two generations simultaneously, will be a reality for many. Kimberlee shared with me the importance of (1) being aware of your family’s potential care needs on the horizon and (2) being proactive in having candid conversations with your parents and children to set clear expectations. Kimberlee discusses the financial implications, the time commitment, the emotional toll, and much more. This interview is not a “10 Step Checklist” or a “How-to Guide,” but rather a REAL conversation with a REAL professional living out this reality. Please join us for an inside look at being sandwiched and the sage wisdom from our very own Kimberlee Davis. Links mentioned in this episode: http://thoughtsonmoney.com http://thebahnsengroup.com

For the month of October, my church is reading through Proverbs together. Conveniently, October has 31 days, and the book of Proverbs has 31 chapters. The marching orders are to read one chapter a day and to extract one nugget of wisdom to meditate on. Yesterday was day 13 (October 13th), and this verse jumped out to me, Proverbs 13:11: Wealth gained hastily will dwindle, but whoever gathers little by little will increase it. Links mentioned in this episode: http://thoughtsonmoney.com http://thebahnsengroup.com

Today is a bit different than normal. Normally, I write an article and then gather a few of my colleagues to discuss the article over a podcast we produce weekly. Today, I flipped the script – Deiya Pernas and I recorded an “unscripted” podcast that I would like to share with you all. No article coincides with our discussion, but rather it was an open dialogue between Deiya and me on a few finance topics that I find interesting – and I hope you will too. I’ve been teaching Sunday school at my church for about 15 years now. What I have learned as a teacher is that each child has a different preferred learning style. Some learn from hearing a story; some prefer to act it out; others want to dive in and read it themselves. We, as teachers, try to deliver a message on all four fronts – visual, auditory, reading/writing, and kinesthetic. I am an auditory learner, and I like to listen to podcasts and have discussions. Podcasts, for me, feel like I am actually in the room – a fly on the wall – listening to a few people dialogue on topics that interest me. Here at The Bahnsen Group, we have a lot of discussions throughout the day across many different departments, and we are always seeking to solve the riddle of how do we serve clients better. We have a daily lunch routine where these discussions often take place, and today’s podcast is an opportunity for you to be a fly on the wall. So, please join us as Deiya and I discuss the following topics: Investment Fees ESG Investing Fiduciary TINA And we close out with a discussion on what I think is the most exciting topic in finance right now. Enjoy! Links mentioned in this episode: http://thoughtsonmoney.com http://thebahnsengroup.com

Here in Thoughts On Money [TOM], we prefer to discuss relevant topics that are financial planning-centric, timely, and surrounded with misconceptions.  The housing market has become a hot topic recently, with current home prices checking all the boxes for a great topic to discuss here on TOM.    In the last 12 months, the median sales price of houses across the country has jumped 15% - 20%, depending on the area you live in.  My wife and I bought our house in October of 2019 and recently had to have our home appraised, which was a value 33% greater than our purchase price just two years earlier.  A jump in prices of this magnitude typically leads to three different types of responses:  Sell while the selling is good  Buy before it's too late  Wait to purchase until prices normalize  For many savers/investors, their residence makes up a significant portion of their balance sheet, which means that this is a crucial planning topic to discuss.  The direction of the wind or the emotion of the hour should not dictate your buy and sell decisions when it comes to your home.    As you can derive from the three common responses, I listed above, a jump in prices typically leads to rushed decision-making.  A feeling or need to "strike while the iron is hot." In the world of financial planning, pressure to accelerate a decision typically precedes bad decisions.  So, slow down, have a process and method for assessing your big financial decisions – none of this ready-fire-aim behavior that riddles our modern financial culture.     Links mentioned in this episode: http://thoughtsonmoney.com http://thebahnsengroup.com

Trevor is joined by TBG colleagues Deiya Pernas, Sean Latimer, and Kenny Molina Links mentioned in this episode: http://thoughtsonmoney.com http://thebahnsengroup.com

Trevor is joined today with Sean Latimer, Nate Straw, and Drew Dill Links mentioned in this episode: http://thoughtsonmoney.com http://thebahnsengroup.com

That first article – Be Aware or Beware – was inspired by a question I was asked while sitting on an interview panel during a Sunday morning church service. I was asked, “What is the number one mistake you see people make with their finances?” Tough question, right? My whole career revolves around talking to people about their money, and I’ve seen some wild mistakes and missteps along the way, but here I was challenged to narrow my answer down to the most common financial blunder. Hmmm… My answer was simple. It was awareness. I felt like, in aggregate, most people didn’t have an awareness of how much they spend. When you boil personal finance down to its basic tenets, it really is just income minus expenses and what to do with the leftovers (hopefully, there are leftovers). Most people have an intimate understanding of how much they make (income), and they take great pride in knowing this figure. But with automatic payments, a handful of credit cards, multiple spenders in the household, etc., there is a major lack of awareness around how much is actually spent monthly and annually. Links mentioned in this episode: http://thoughtsonmoney.com http://thebahnsengroup.com

A portfolio should be designed and constructed based on your financial plan. This design should be strategic in nature and be built to weather or endure the typical ups and downs of the typical business cycles. One should not be tinkering on a whim because of a spark in appetite, all based on recent performance. There is a good reason why you should never grocery shop when you are hungry. Well, at least don’t do it without bringing along your grocery list. If you go into that store without a plan, and your tummy is a rumblin’, you are going to walk out of that store with a whole lot of junk you don’t need. Often, your eyes are bigger than your stomach. Links mentioned in this episode: http://thoughtsonmoney.com http://thebahnsengroup.com

What do Elon Musk, Jeff Bezos, and Richard Branson have in common? They are founders and entrepreneurs; they are billionaires, and they are all competing in this modern-day space race. These three have achieved all their financial goals and much more. Long ago, they surpassed the status of financial freedom. And, at some point, they had to decide “what’s next?” Their “next” was not small – they were dreaming big. The exclamation mark on their legacy will be to go where no man has gone before. I am sure some, or all of these gentlemen, grew up reading sci-fi books, watching Star Wars or Star Trek, and wondering if they too could one day sail into the mysterious unknown of the universe at large. For Carnegie, it was library’s stretching across our nation. For Gate’s, it was and is his foundation, and for Mother Theresa, it was the example of her life that will continue to inspire others for generations. A financial plan concludes with a legacy. Links mentioned in this episode: http://thoughtsonmoney.com http://thebahnsengroup.com

Often financial planning will lead you to a fork in the road.  You will start by laying out multiple options for different financial objectives.  Through a process of elimination, you will narrow your options down to this or that.    Sometimes one option will create a “better” financial outcome, but your preferences will lead you to go the other route.  This can be a conflicting exercise and cause some investors stress.  Why? Because they only measure what they can put in a calculator.    Here’s the first question I want you to ask yourself – will this decision make or break my financial plan?  Most likely, the answer is no.  This means that you can choose either path. You absolutely don’t need to always lean towards maximization.    Don’t stop here.  Press further into where that preference you expressed comes from – pull on that thread.  This exercise will usually help you to learn more about what’s most important to you.  For some people, they’ve always aspired to be debt-free, so they choose that fork in the road.  Having multiple years of expenses in cash brings them an elevated peace for some people, so they choose that fork in the road.  For others, expressing their values and beliefs based on the way they invest outweighs chasing the highest possible returns, so they choose that fork in the road.    Links mentioned in this episode: http://thoughtsonmoney.com http://thebahnsengroup.com

Our intuition leads us to believe that markets are subject to the rules of gravity – what goes up must come down. But, in reality, markets are the summation of American businesses, businesses that measure their results regularly and are striving to outdo last month’s, last quarter’s, last year’s results. Great companies thrive, struggling companies lay by the wayside, and the aggregate tenacity and industriousness of the US market continue to improve AND set new all-time highs. All-time highs are the rule, not the exception; the expectation, not the hope.  This week's TOM takes on the age-old question..." should I invest during all-time highs?"  Links mentioned in this episode: http://thoughtsonmoney.com http://thebahnsengroup.com

In April of 1985, the world was introduced to New Coke. A corporate faux pas that would go down in history as one of the greatest marketing flops of all time; a what-not-to-do case study taught in business schools across the country. As the tale is told, the Coca-Cola leadership team was nervous about losing market share to competitors. This anxiety was amplified by the PepsiCo marketing campaign – The Pepsi Challenge, a blind taste test that concluded consumers preferred Pepsi to Coke. The powers at be at Coca-Cola wanted to innovate, and they wanted to give the customer what Coca-Cola thought they wanted – New Coke, a sweeter flavor, a more Pepsi-like beverage. It was no more than three months later that the company, Coca-Cola, reintroduced their classic flavor re-branding it with the “Coca-Cola Classic” moniker. This soft drink story is the perfect example of the collateral damage caused by misleading benchmarks. Today we will talk about how benchmarking in investing can sometimes lead to similar woes. Links mentioned in this episode: http://thoughtsonmoney.com http://thebahnsengroup.com

Trevor Cummings, the author and podcast host of Thoughts on Money, tackles the key topics investors care about the most. Links mentioned in this episode: http://thoughtsonmoney.com http://thebahnsengroup.com

Risk Tolerance is one of the most obscure topics in finance. It’s extremely personal and difficult to measure. Our industry invests a lot of time, money, and resources to determine your personal risk tolerance. Why? Because the optimal investment plan (portfolio) is the one that you can actually stick with, not the plan that pencils best in a textbook equation. If it does not suit your sensibilities, whatever they may be, you won’t possess the discipline to see it through to your desired goals. Historically, times of calamity have led investors to abandon their plan, which is why the finance industry seeks this clarity around your investing tolerance levels. Links mentioned in this episode: http://thoughtsonmoney.com http://thebahnsengroup.com

Trevor is joined by Sean Latimer, Drew Dill, and Nathan Straw Links mentioned in this episode: http://thoughtsonmoney.com http://thebahnsengroup.com

2020 offered two key moments that are worthy of reflection. Though 2020 feels like ages ago, right? Many of us are probably not inclined to reflect on a year that we’d prefer to forget. Too often, we use the review mirror as a tool for regret rather than reflection. Here’s the difference – regret leads us to shame and embarrassment about a decision we wish we didn’t make. Reflection allows us to take a cerebral time machine and rethink our decision-making process. The benefits of hindsight allow us to see the impact of our process and our decisions clearly. The goal of reflection is not to cast judgment on your former self but rather to educate and inform your future self. Now, let’s discuss those two key moments in 2020 that I am referring to… Links mentioned in this episode: http://thoughtsonmoney.com http://thebahnsengroup.com

’ve been a sports fan most of my life. I‘ll watch any sort of sport, from the Tour de France to the Olympic Games to Baseball. The athleticism, the competition, the historical moments; what’s not to love? If I had to pick my top two favorite sports, it would probably be basketball and football. I could describe to you many attributes that differentiate these two sports. One has pads and full contact, while the other is more a game of finesse; one has an 82-game season, while the other has a 16-game season; one has a roster of 15 players, while the other has a roster of 53 players. Again, two totally different sports, but I’d like to draw your attention to one unique difference between basketball and football. In football, you play either offense or defense. In basketball, you play offense and defense. A slight difference that’s often overlooked. So, why does this matter? Well, in football, you know your role and purpose. Your duties are clearly defined – you either tackle or avoid being tackled. In basketball, these lines are much more blurred. You may be a specialist at defending or ball-handling, or shooting, but your responsibility is still to show up on both defense and offense. The allure of offense, making baskets, and being the superstar on the court, can sometimes create quite a distraction. Today I will discuss why you should view your portfolio like a football team as opposed to a basketball team and how a “basketball team” portfolio can get you in trouble. If I’ve piqued your curiosity, read on… Links mentioned in this episode: http://thoughtsonmoney.com http://thebahnsengroup.com

What is the best hedge against inflation? (a) Bonds (b) Cash (c) Stocks (d) Gold The answer is “c.” Why? Let’s keep it simple: if inflation is a rise in the price of goods and services and businesses sell goods and services, it would be safe to assume that sales would grow concerning inflation. This is an imperfect explanation because there are more variables and complexities, but the basic truth applies. And, history reflects this truth, stocks have a long track record of providing a return well beyond historical inflation in the aggregate and the rolling ten-year periods, etc. So, if your goal is to bolster up your portfolio to combat inflation, then it would be worthwhile to study your asset allocation and understand how much you have allocated to stocks? Is your allocation sufficient based on your expectations and inflation concerns? Links mentioned in this episode: http://thoughtsonmoney.com http://thebahnsengroup.com

Today, I want to talk about a word in finance that is often misunderstood and/or ignored – liquidity.    There is a language of finance, and liquidity is one of those words that can be difficult to describe; it’s much like one of those words or phrases in Spanish or French that just doesn’t translate well into English.    We hear things on the news about how the Federal Reserve is “injecting liquidity into the system,” or maybe we read an article about how “liquidity issues” led to the demise of a certain hedge fund or family office.    You realize liquidity serves an important role, but maybe you don’t exactly know how it applies to your situation.  Even a quick dictionary search doesn’t give you much clarity.    So, let’s discuss how this mysterious concept of liquidity applies to you personally and how crucial liquidity is to your personal financial plan.  Links mentioned in this episode: http://thoughtsonmoney.com http://thebahnsengroup.com

Growing up, I didn’t know the difference between salad and lettuce. I’d always asked my dad to put salad on my sandwich. Luckily, dad knew what I meant. All this to say, words have meaning, and they can often get lost in translation. There is a lot of vocabulary when it comes to finance, and there is a language of finance. You need to be careful not to misuse these financial terms in a fashion that would mislead your portfolio or financial plan. It’s helpful to have an advisor. They can be your guide; they can be your translator. My dad was a great advisor; he didn’t pile a salad onto my sandwich. Our waiter just took our order and gave us what we asked for (nachos); he was not much of an advisor. You need an advisor, as these mistakes in the realm of personal finance can be costly. Because maybe, just maybe, diversification doesn’t mean what you think it does. Links mentioned in this episode: http://thoughtsonmoney.com http://thebahnsengroup.com

A surplus in cash flow can be problematic.    Alternatively, when one has more income than expenses, it can be difficult to decide what exactly to do with the leftovers.  Here at The Bahnsen Group, one of the core strategies we implement is a dividend growth strategy.  Many of our clients love this philosophy and its mechanics because it generates a predictable and sustainable income.  BUT, beyond these benefits, perhaps one of the greatest arguments for the validity of this strategy is that dividends are, in fact, a great use of “leftovers” (profits).    Contact: tom@thebahnsengroup.com Links mentioned in this episode: http://thoughtsonmoney.com http://thebahnsengroup.com

I’m married to a planner. I have become well versed in scoping the landscape and communicating to my wife all the possible things that could happen. Many of these things don’t end up happening, but the love of my life appreciates me being her eyes and ears. The reason that books like “What to Expect When You’re Expecting” are bestsellers is that all of us have a little planner inside of us. We know what it feels like to be put on the spot or be surprised and unprepared to react. We all have comical stories relating to our unprepared responses and reactions. Now, the reality is, is that surprises are just a normal part of life. We can’t predict every potential outcome we face, but if we are in regular conversation about the good, the bad, and the ugly, we start to train or prepare ourselves because surprises are normal. The ultimate goal is not to be surprised by surprises. No rise in your blood pressure, no feeling the need to go off-script, but rather referring back to conversations with your safari guide (advisor) about the importance of staying the course. Clarity around expectations and regular communication about the range of potential outcomes. That’s it. Links mentioned in this episode: http://thoughtsonmoney.com http://thebahnsengroup.com

My wife and I have two sons at home, 2.5 years old and 9 months old.  Even at these young ages, we can see how different these two boys are.  They look different and behave differently; they eat differently and sleep differently; they laugh differently and cry differently.  Two brothers, same family, each unique in their own way.    I myself have two siblings, a brother, and a sister.  Each of us three years apart in age, me being the youngest.  We each have our different strengths and weaknesses.  We have our own unique experiences and perspectives.  Again, the same family, but all very different.    This reality is not unique to just me or my family.  Since the beginning of time, families have been populated with a diverse set of individuals.  From Cain and Able to the Kardashians.    Can you relate?  How about you and your siblings – Similar? Different?   Today on TOM, I’d like to discuss two financial siblings that I am sure you are quite familiar with – Stock Prices and Dividends.  These are two financial metrics that are of the same family but tend to behave and look quite different from one another.    http://thoughtsonmoney.com http://thebahnsengroup.com

Growing up, I adopted a negative view of borrowing.  I saw many family members get in over their heads in debt, which eventually led to horrible things like divorce and bankruptcy.  I looked up to many people in my community and at my church who talked about debt as something dangerous or evil.  I always thought it was best to avoid debt like the plague with these exposures and perceptions. When I went to college, I worked full-time and paid for all my classes as I went.  I never took out one student loan for undergraduate or graduate school.  I was afraid of borrowing because of the damage that I had seen it cause. In my first Corporate Finance course in grad school, I started to really comprehend the math behind leverage (borrowing) and the potentially positive outcomes it could create for a company.  By looking at the interest expense associated with the debt concerning the potential return on capital, one could decipher if it was prudent to borrow. Prudence was the key. This new lesson on prudent borrowing shifted my paradigm of how I viewed debt, and my long-held negative associations of debt were being challenged. tcummings@thebahnsengroup.com dpernas@thebahnsengroup.com Links mentioned in this episode: http://thoughtsonmoney.com http://thebahnsengroup.com

Do you suffer from financial cravings? TOM helps put you on the right financial diet to keep your portfolio healthy! Links mentioned in this episode: http://thoughtsonmoney.com http://thebahnsengroup.com

Over the last few months, many of my Thoughts On Money have revolved around the importance of marrying one’s financial plan and investment management. That is to say, that the financial plan should be the driving force behind how an investment portfolio is designed. Now, I am not talking about a “financial plan,” as in, a 100+ page bound printout that makes its way from your advisor’s office to being a dust-collecting–paperweight at your home. I mean, the actual planning of finances – the living document, the dialogue, the collaboration around how to best plan all of your money decisions. Often this is not the case, though; these two practices – financial planning and portfolio construction – are held in isolation and not seen as a collaborative exercise. This is a problem. This results in investors and many advisors trying to develop alternate (sub-optimal) methods for how to best design a portfolio. Some will conclude with a one-size-fits-all age-based solution, and some will try to navigate these waters with a risk-survey-only driven process. Today, I want to teach you about a process I call Expense Based Planning (EBP). Links mentioned in this episode: http://thoughtsonmoney.com http://thebahnsengroup.com

I come across a lot of people that implement strategies from investors they admire. Much too often, these strategies are constructed without understanding the context or reasoning behind the strategy. This misunderstanding often leads to disappointment, as the outcomes don’t always meet the investor’s expectations. You have goals, and these are often unique goals. These goals revolve around what’s important to you. Your financial situation is unique, and that uniqueness should be understood and reflected in your financial plan and your portfolio. Some billionaire sharing a soundbite in passing doesn’t know you, your goals, or what’s important to you. Mimicking their approach is about as silly as me trying to emulate Steph Curry on the basketball court. Opinions are just the tip of the iceberg. Just like our discussion today on annuities, you have to peel away the layers to understand the basis for these opinions. Then you take those first principles you derive from this process and use that reasoning or those objectives to craft a solution most fitting to your situation. It’s not easy, but that’s the fun part. The journey is never over… Links mentioned in this episode: http://thoughtsonmoney.com http://thebahnsengroup.com

Our family takes full advantage of this beautiful weather, and I am sure these claimed averages do ring true, but this does not stop us from checking the weather forecast on a daily or weekly basis. Whether we are making a trip to the local zoo, planning a beach day, or having a picnic with friends, we’d like to know the specifics of what the weather will be like. We need to know if we should pack jackets for our two boys or if we should wear shorts or on the rare occasion that it would be wise to bring an umbrella. We don’t prepare for an outing based on the “average” weather; we plan according to the day’s actual weather. I know the statement above is both obvious and silly, but when it comes to inflation, people often prepare and fear the “average,” but are unaware of the actual. Today we will discuss why inflation is a very personal matter and how one’s financial plan should address their personal inflation expectations. Links mentioned in this episode: http://thoughtsonmoney.com http://thebahnsengroup.com

Have you ever tried to learn a foreign language? It can be a slow and arduous process. Many say that an effective way to speed up the learning process is to immerse oneself in a foreign language country. The most common areas where students fail are just the lack of vocabulary, poor sentence structuring, or conjugating verbs erroneously. Yet, there are some instances when the errors become quite comical. I have a funny story to start out today’s TOM discussion, so join us on a short journey south of the California border. Links mentioned in this episode: http://thoughtsonmoney.com http://thebahnsengroup.com

For a financial professional, there are two decisions that need to be made: (1) What will I recommend to clients? (2) What will I personally own? What I find interesting is whether or not the same answer will suffice for both questions. As I mentioned, the investment options in the marketplace are extensive, but even this never-ending list is trumped by an even greater financial phenomenon – financial opinions. Everyone – amateur and professional alike – seems to have an opinion on how to invest and what to invest in. Links mentioned in this episode: http://thoughtsonmoney.com http://thebahnsengroup.com

We live in a world that we could have never imagined a decade ago. We are more “connected” today than ever, yet many of us are feeling more alone than ever. We have access to more information today than we ever have, yet many of us are feeling even more uniformed. The headlines are littered with polarizing opinions on everything from the pandemic to politics. And now add to this, a highly publicized stock market battle, in which a group of message-board-rebels are using the stocks of struggling companies as financial weaponry against a handful of hedge fund titans. All the while, sideline spectators (speculators) are jumping in the frenzy, hoping to get-rich-quick. All of this is unsettling, to say the least. Links mentioned in this episode: http://thoughtsonmoney.com http://thebahnsengroup.com

Have you ever played musical chairs? An exciting game, full of anxiety and anticipation, as you are left wondering if you will be left without a seat in the end. When the music stops, that is when the exclamation mark is written, that is when the calamity begins. Just to provide clarity, I’d like to answer two questions for our readers (1) Do I believe there are pockets of “bubblicious” investments in the markets today? Yes. (2) Do I believe that there are investments at attractive bargain prices today? Yes. We have a very valuation polarizing market and all the more reason to be selective and diligent about what you own. So, is it possible to know when some of these bubbles will burst and when the music will stop? I believe Sir John Templeton provides some great insight on these matters, “Bull markets are born on PESSIMISM, grow on SKEPTICISM, mature on OPTIMISM and die on EUPHORIA.” The aroma of euphoria is strong, my friends. Proceed with caution. Links mentioned in this episode: http://thoughtsonmoney.com http://thebahnsengroup.com

Trevor is joined by TBG co-workers Sean Latimer and Leslie Rea to talk about developing the right kind of financial portfolio. Links mentioned in this episode: http://thoughtsonmoney.com http://thebahnsengroup.com

Trevor has a conversation with TBG Managing Director, Solutions and Analytics regarding investing principles and how to take the fear out of the process. Links mentioned in this episode: http://thoughtsonmoney.com http://thebahnsengroup.com

Start with broad categories to begin organizing your potential checklist items. For personal finance, that’s things like Tax Planning, Estate Planning, Insurance, Charitable Giving, Cash Management, Investment Allocations, etc. Next, start asking yourself questions relative to these categories: Are there any tax strategies that I should be implementing before the end of the year? Are there any areas of my life in which I am potentially underinsured? Is there a more efficient and organized way to conduct my charitable giving? Is there an opportunity to reduce my borrowing costs? Then, begin bullet pointing your action items relative to the questions you asked and discussed with your advisor. Lastly, prioritize your list. Prioritizing should be based on two metrics – importance and difficulty. Ideally, you want to tackle the most important and impactful items first, but some of those items might be time-consuming, so you might want to knock off the easier to complete items first. There is nothing wrong with tackling the simpler obstacles first. This is a great way to get a quick win under your belt and build a little momentum. Links mentioned in this episode: http://thoughtsonmoney.com http://thebahnsengroup.com

If you worked at The Bahnsen Group, you’d know that Sean Latimer and I eat lunch together just about every day. We are blessed at The Bahnsen Group to have a very tight-knit, family-like culture. Sharing lunch together is a time to bounce ideas off one another, share best practices, and problem solve. I learn a lot from these lunchtime conversations, and I am a better advisor for it. This week, during one of these lunchtime discussions, Sean shared an idea for a topic that he suggested we discuss here on Thoughts On Money [TOM], and today, we will do just that. Sean premised his topic recommendation with a story… Links mentioned in this episode: http://thoughtsonmoney.com http://thebahnsengroup.com

Let’s imagine we had a time machine, but this time machine would only allow us to go back 90 days – that’s it. So, we jump in our time machine, pull the green lever, push the special purple button, and zoom off we go. We open the door and find ourselves back in the first week of September. What’s grabbing headlines? What’s filling our social media feed? What’s the conversation du jour at the coffee shops? Politics. The country will spend the next 60 days wondering how this 2020 election would play out and how the balance of power might shift one way or the other. Anxiety was high, and uncertainty was rampant. Now, let’s imagine we went around polling folks to ask what they expected a November stock market to look like? This was that exact November that was sparking so much angst – it was THE election month. I am sure you would agree that most of our conversations would revolve around a pessimistic outlook for markets in November. This was the consensus opinion leading up to November. Luckily, we are from the future, so we know what did happen, “It was the best November for the Dow since 1928 and the best November for the S&P since 1950. It was the best month, period, for the Dow since January 1987.” (David Bahnsen, The DC Today). Quite polarizing when we begin to compare the expectations and the actual outcome. Was anyone optimistic about November? Sure, but those voices belonged to the minority and were probably drowned out by the somber majority. What do we call this minority that refuses to follow the herd? We call them contrarians. Links mentioned in this episode: http://thoughtsonmoney.com http://thebahnsengroup.com

Trevor Cummings and Sean Latimer from The Bahnsen Group Links mentioned in this episode: http://thoughtsonmoney.com http://thebahnsengroup.com

What happens if you don’t have principles or an investment philosophy? Then you are going to lean on what “feels” right at the time. These feelings, or what you might label intuition, are often influenced by the current environment you find yourself in. So, in a year like 2017, when you see bitcoin climb from $1,000 to nearly $20,000, you might find that your investment interest has peaked. On the other hand, in a year like 2018, when you see that $20,000 mark plummet back to the $3,000 range, then you would likely be a bit more disenchanted. An investor without principles is like an unanchored balloon; it will go wherever the wind takes it, for better or for worse. Links mentioned in this episode: http://thoughtsonmoney.com http://thebahnsengroup.com

Stubborn as a mule. That’s how the saying goes, and I’m often that mule. Stubbornness at times can be a strength when it’s a result of deeply held convictions. More often than not though, stubbornness is a weakness. People find themselves falling in love with a conclusion and over time they forget to go back and review the supporting evidence for that conclusion. The longer a position is held the more cemented our stance becomes. Lately, I’ve found myself explaining financial planning to clients this way – for each financial decision you have to make you need to put all the potential options on the table and weigh them against one another. Each option has its own costs and benefits, and there are trade-offs based on which option you choose. I try to emphasize that ALL options need to be at least reviewed and considered. Life is full of taboo topics and subjects that you know are common hot buttons in conversation. In finance, these topics might be things like debt or insurance, or cryptocurrency. To combat stubbornness, even our “hot button” options need to be discussed when relevant to a particular financial decision you are wrestling with. Links mentioned in this episode: http://thoughtsonmoney.com http://thebahnsengroup.com

In the world of Psychology, there is an often-cited study that was conducted at Stanford University called the Marshmallow Experiment. This was research targeting the study of delayed gratification. The research consisted of multiple test variations, but the process across the board was similar. The test subjects, children, were offered the option of one marshmallow now or two marshmallows later, if they were willing to wait. Again, the study was intended to measure the children’s self-control. The researchers would then follow up a decade or so later to see if the test subject’s ability to delay gratification resulted in a measurable difference in SAT scores, etc. Would the child who was willing to delay gratification be predestined to more success based on their ability to resist eating that first marshmallow? These researchers came to their own conclusions on this relationship between one’s marshmallow decision and how that relates to one’s future successes in life. And like most research, this study has also received its fair share of criticism too. Here’s my question, could one opt for eating the first marshmallow now for reasons unrelated to self-control or patience? What if I wasn’t interested in two marshmallows, and eating one now was more appealing for me personally. Could this decision be deeper than just a binary conclusion separating participants into categories of patient and impatient? This seems silly to dialogue about when we are talking marshmallows, but there are many examples in life where we are offered incentives to delay engagement. For these 6-year-old test subjects, it was about marshmallows, but for 62-year-olds, this decision is about claiming social security. Links mentioned in this episode: http://thoughtsonmoney.com http://thebahnsengroup.com

Another great episode with Trevor Cummings and Sean Latimer of The Bahnsen Group Links mentioned in this episode: http://thoughtsonmoney.com http://thebahnsengroup.com

This week's Thoughts on Money [TOM] is filled with some personal stories that, of course, I think are interesting but I promise that I get into some key financial principles for you to consider. I'm especially pleased this week's episode of the TOM podcast (with my co-worker, Sean Latimer) as we make dig into some key aspects of compounding of this week's blogpost. The article ends with one of my favorite videos I've seen in quite some time! Links mentioned in this episode: http://thoughtsonmoney.com http://thebahnsengroup.com

One attribute of outstanding leadership is one’s ability to cast vision; to clearly articulate the organization’s objectives in a simple and inspiring manner. We call leaders that excel in this area visionaries. I’m currently on a team at church to develop a vision statement for our congregation. I didn’t realize coming into this project just how difficult that task would be. To assist in the process, the group has been reading, listening to, and watching content on what it takes to develop a great vision statement. One video/speaker stood out to me. He posed this question, “What kind of qualities do you want to have as a leader?” He noted that the common answers are qualities like integrity, honesty, etc. He argued that the attribute we should all aspire to is clarity. The speaker went on to say, “Sure, we value integrity, but we follow clarity.” A great vision statement, like a great leader, provides clarity. Here at The Bahnsen Group, we are amid our own project that intends to clarify how we design and manage client portfolios. Appropriately named, we are calling this project, Operation Magnify. Our Chief Investment Officer and Founder, David Bahnsen, has been referencing this project throughout some of the content we produce, and it’s begun to spark lots of interest and inquiries. I thought no better place than TOM to provide my perspective on Operation Magnify and what it means to The Bahnsen Group clients. Links mentioned in this episode: http://thoughtsonmoney.com http://thebahnsengroup.com

The bible tells us, “Pride goes before destruction, and a haughty spirit before a fall” (Proverbs 16:18) a warning about overconfidence and how arrogance frequently leads to failure. In our culture, we often hear these famous last words precluding a fall, “It’s a sure thing.” If you’re a frequent visitor to Thoughts On Money then you know I love the game of basketball. I love playing basketball, talking basketball, watching basketball, and anything else that relates to the game of basketball. My wife can attest to the fact that I even sometimes let our two-year old eat in the living room with me, so we can watch the game during dinner – of course, this is absolutely justifiable, as we are amidst the NBA playoffs. Today on TOM we will discuss basketball, Bitcoin, leveraged ETFs, gambling, and why investors should always beware of a sure thing. What a combination of topics! And off we go… Featuring Sean Latimer, Private Wealth Advisor at The Bahnsen Group Links mentioned in this episode: http://thoughtsonmoney.com http://thebahnsengroup.com

Financial planning is a math equation. This equation has multiple variables ranging from intrinsic metrics like your goals, financial resources, personal preferences, and so on, to external factors like inflation, tax rates, expected rates of return, and so on. For this equation though, the conclusion is less like a math solution and more like a report card: "A" is passing with flying colors, "C" is barely passing, and "F" is failing. Do you know where you stand as an investor? Have you done sufficient planning with your advisor and are ready for a test of your financial plan? It would be best if you had clarity on what "grade" your current plan would receive and what steps you need to take to improve on that grade. Today on Thoughts On Money looks at three financial planning grades and discuss what considerations each "student" (and "teacher/advisor") should focus on. Links mentioned in this episode: http://thoughtsonmoney.com http://thebahnsengroup.com

Since the inception of Thoughts On Money, the objective has been the same - to help translate the complex world of personal finance into something more palatable and to address common questions that investors have. If you've been a long-time reader of TOM, you know that most investment questions don't have a one-size-fits-all answer; this is why I commonly encourage readers to address these particular issues we discuss with their advisor. The problem with often concluding, "best to discuss with your advisor," is that you, the reader, don't get the opportunity to peek behind the curtain and see how an advisor would think through one of these financial solutions. Today I am going to invite you to one of those problem-solving exercises. We are going to address a common financial issue/question, and I really want you to focus your attention on the process of how one would go about deriving a solution. These financial problem-solving skills are the key takeaway or learning opportunity, not the actual conclusion. This lesson should not be too dissimilar to a high school math course that you've taken in the past. The textbook provides most of the answers in the back of the book because the teacher is less worried about you getting the right answer as much as your ability to structure the steps needed to come to that answer. Just as the proverb goes, "Give a man a fish, and you feed him for a day; teach a man to fish, and you feed him for a lifetime." Today I will teach you to fish. Links mentioned in this episode: http://thoughtsonmoney.com http://thebahnsengroup.com

There is a debate out there in the world of finance. A debate about active vs. passive investing. Today I take you on a journey through my personal timeline, how I bumped into this debate, and why I think we are all having the wrong conversation. Come find out why in, fact, all of us are exactly the same kind of investor at our core. Links mentioned in this episode: http://thoughtsonmoney.com http://thebahnsengroup.com

This week's Thoughts On Money addresses the never ending quest for "free money." Whether it's some get rich quick scheme someone at work is whispering about or a "sure thing" at the local horse track, many people are enticed by the quick and easy path to riches. In these COVID times, there are no shortages of people touting their short-term trading successes and mistaking gambling for investing. The reality is that this kind of risk taking is a trap, a trap that can cost you your financial future. I hope this week's article will help you think twice before you gamble on a bad investment. Links mentioned in this episode: http://thoughtsonmoney.com http://thebahnsengroup.com

Today I want to address a question I have been getting a lot from clients and friends. This question is usually premised by a comment or concern sounding something like this, “I am worried that this election in November means that [FILL IN THE BLANK] will win the presidency and that will have a negative impact on markets… does this mean that I should sell my stocks?” In order to answer this question, I need to take you on a little journey and give you a better understanding of how the stock market works. Links mentioned in this episode: http://thoughtsonmoney.com http://thebahnsengroup.com

Here’s the problem with commitments, they take time and time is a finite resource. Personally, I need to learn to not overcommit. More and more, I see products promoting themselves with financing options. Everything from a mattress to a stationary bike is being marketed with long term financing options. Something with a $2,500 price tag might seem too rich, but a $60 monthly payment over 3 or 4 years becomes more palatable. Our culture has begun to create “luxury” everything and these price tags for these “luxury” items are meaningful. If lump-sum purchases were the only option, the demand would shrink. What happens is that these seemingly “micro” commitments compound, and as one accumulates more commitments, they begin to place an even greater burden on their cash flow. These commitments do not only come in the form of financing large purchases they also surface as subscriptions. Subscriptions to everything from streaming video services to theme park memberships. These subscription models make sense from a business perspective because businesses want predictable and sustainable income. For you, the consumer, this means that you have a defined amount of your income that has already been spoken for. Here’s where I want to encourage you to shift the way you think about subscriptions and financing. When you choose to commit to something today and plan to pay for it later you are choosing to allow your “current self” to enjoy the utility of your purchase and you are committing your “future self” to pay for it. Naturally, we have a tendency to derive the greatest enjoyment from a new purchase at the beginning, yet the cost lives on. Links mentioned in this episode: http://thoughtsonmoney.com http://thebahnsengroup.com

Many researchers conclude that an average adult is responsible for making 35,000 decisions a day. Some of these decisions are big, like who you will marry, and others are small, like deciding whether you want cream and sugar in your coffee. To help us navigate these complexities, and the barrage of decisions to be made, we lean on heuristics – little mental shortcuts that help us make quick rule-of-thumb judgments. Today I would like to address one of these common finance simplifications, “Cash is king” and discuss how we should and should not be applying this to our personal finances. Links mentioned in this episode: http://thoughtsonmoney.com http://thebahnsengroup.com

Joined by TBG Advisor Sean Latimer, your host Trevor Cummings answers some questions of how markets really work. Links mentioned in this episode: http://thoughtsonmoney.com http://thebahnsengroup.com

The human condition finds most of us being short-sighted. What I mean by that is that we tend to get caught up in current events and what’s happening in the here and now, leaving us more often lacking as long-term planners. But beyond solving the short-term (short-sighted) of say, needing a paycheck to keep the lights on, we (investors) also have other aspirations for our money and what it will finance in the future. That growing balance in our investment account represents the accomplishments that coincide with our goals and desires. Will we have enough to pass down to our heirs or the charities that are near and dear to our hearts or the comfort that our nest egg provides as an emergency resource. Links mentioned in this episode: http://thoughtsonmoney.com http://thebahnsengroup.com

Today’s article is about that day we hang up our occupation and step into retirement. The question is, will you love it? Links mentioned in this episode: http://thoughtsonmoney.com http://thebahnsengroup.com

The key to making good decisions is creating an environment that is conducive to success. When it comes to investing, much of this battle is fought in your mind and it revolves around expectations. Most bad financial decisions will be a result of an investor reacting to disappointment – an investment did not meet their expectations, and this triggered a feeling of disappointment which then lead to a poor decision. Here on TOM, we’ve stated that there are big differences between long term average returns and the actual returns you experience on a yearly basis. If you hear someone say something like, “The stock market has returned 9% on average over the last 100 years” then you might expect that if you invest in the stock market then you should always expect a 9% return. Whenever we see this word expect, it should be a warning sign. So… to equip ourselves for the realities of markets and to create that optimal environment for success, we need to first set the right expectations. Links mentioned in this episode: http://thoughtsonmoney.com http://thebahnsengroup.com

I love playing basketball, watching basketball, thinking about basketball. I love basketball. Maybe it’s because it not only requires skill, agility, and endurance but also because the best teams win because they have a good game plan, one that is able to adjust to their opponent, one that is disciplined and practiced to perfection. If you would be so kind as to indulge my obsession for a minute, I believe the analogies I use for my favorite sport and my favorite profession will be interesting and helpful. So let’s dribble on in to TOM. Sorry, I couldn’t help myself! Links mentioned in this episode: http://thoughtsonmoney.com http://thebahnsengroup.com

This past week I had the pleasure of getting lunch with a recent high school grad to discuss the wonderful world of finance. He’s a bright young man and is exploring what he wants to study in school and the career path that most interests him. He’s got a knack for numbers and thinks investing and/or advising might be a good fit. These exploratory conversations about finance often tend to spark some really interesting dialogue, getting me to the core of why I do what I do. With such a tumultuous time in the market on his mind, this young lad asked a simple question – Why do people invest? While the question is simple, the answer does have some interesting components to it. This week’s Thoughts On Money takes on this and more. So off we go… Links mentioned in this episode: http://thoughtsonmoney.com http://thebahnsengroup.com

I typically devote some part of my weekend to researching on what I plan to discuss each week on Thoughts on Money [TOM]. I had no idea that my decision to write on topics of risk, drawdowns, and recovery periods, as I believe these are important topics for investors to understand, would also be so timely based on how the markets kicked off this week! Links mentioned in this episode: http://thoughtsonmoney.com http://thebahnsengroup.com

Will the income from your portfolio satisfy all of your living expenses in retirement? This week's TOM looks at important factors to consider. Links mentioned in this episode: http://thoughtsonmoney.com http://thebahnsengroup.com

In the past few weeks, I’ve found myself in multiple conversations explaining the need and purpose of life insurance. We’ve covered this topic in previous issues of TOM, but based on the recent inquiries, I thought it appropriate to provide a succinct refresher. Links mentioned in this episode: http://thoughtsonmoney.com http://thebahnsengroup.com

Topics discussed: In the old fable The Tortoise and The Hare we find this classic tale of the slow and steady vs. the erratic and volatile. This fable lends itself well to many financial analogies, and rightfully so. Looking back at my personal investments over the years, I am pleased with the prudent, tortoise-like decisions I’ve made yet I still experience some level of disappointment as I reflect on a few emotional, hare-like choices that I now regret. As an analogy for much of life, investing is a marathon, not a sprint. In TOM this week, let’s examine the nuances of taking one’s time when investments are involved and how easy it can be to rush toward a fast buck. And off we go… Links mentioned in this episode: http://thoughtsonmoney.com http://thebahnsengroup.com

Topics discussed: I had two conversations last week that came to opposing conclusions about 2020. One friend told me they had a gut feeling about 2020 and they felt strongly that the momentum from 2019 would carry over and their stock investments would do even better in 2020. Another friend told me that they felt like 2019 led to an overheated market and they were fearful whether they should own any stocks at all. To both conclusions, I replied with the same question, “Why so?” I asked this question because I wanted to know if their conclusion was grounded in logic and evidence or if it was simply birthed from a feeling. Our emotions can be deceiving, and our memories can be selective, which is why I don’t put a lot of confidence in these types of gut predictions. But, hey, let’s lean into these claims and parse them out in today’s Thoughts On Money. Links mentioned in this episode: http://thoughtsonmoney.com http://thebahnsengroup.com

Topics discussed: As we closed out 2019, I fielded a lot of questions about Donor Advised Funds (DAFs). For some, this inquiry was sparked by an interest in the tax benefits for 2019 planning and for others, it came from a place of curiosity whether a DAF would be suitable for their situation. I know we’ve touched on Donor Advised Funds before here at TOM but based on all the inquiries, it would appear to be worthwhile to conduct a refresher. Giving has its own rewards. This week, TOM helps you increase those benefits as you pay it forward. Join me as we discuss one of my favorite tools in personal finance. Links mentioned in this episode: http://thoughtsonmoney.com http://thebahnsengroup.com

Topics discussed: As we enter into 2020, we know one thing to be true – politics are going to be a hot topic. Each week the news is going to headline different candidates, we will get a break down of each of their platforms, and there is going to be much uncertainty around who will win the election. One of these topics that are going to get a lot of air time is student debt. Currently, the U.S. Department of Education has lent to about 43 million borrowers, and there is about $1.4 trillion of outstanding debt These are big numbers! Find out how to plan for success in funding education. Links mentioned in this episode: http://thoughtsonmoney.com http://thebahnsengroup.com

Topics discussed: As we approach the end of the year, I brace myself for the many retrospective look-backs on 2019 from my favorite media sources. And being that this year also marks the end of a decade, it will naturally invite even more reflection of how the past may inform our future. In the world of investing, the former decade (2000-2009) has now been appropriately deemed, “The Lost Decade.” A ten-year period that was bookended by two significant market events – The Dot Com Crash and The Great Recession. And this leads me to wonder, what central theme will we assign to the 2010’s? Links mentioned in this episode: http://example.com http://second-example.com

Topics discussed: The end of the year is a season when I conduct a lot of review meetings with clients. Along with discussing holiday plans, sharing updates on our families, and so on, it’s the perfect opportunity to do some year-end tax planning, review how investments have fared over the year, and to catch up on any other planning items we are working on. It’s also a great opportunity to itemize our goals and notate tasks that we’d like to get completed in the coming year. While these client meetings are never exactly the same, some themes come up time and time again like that of the math behind “total return.” I’ve found myself writing this equation down with a sharpie in numerous client conversations: Total Return = Appreciation + Income. I know, it’s simple. It almost seems silly to mention, but there is so much behind this simple equation that I think it’s worth discussing. I’ll use the example of three areas most people are familiar with as it relates to their assets and the value they derive from each of them – Real Estate, Stocks, and Bonds. Links mentioned in this episode: http://example.com http://second-example.com

Topics discussed: As we approach the New Year many of us will begin to think about the resolutions that we want to make for 2020. We know from experience that these resolutions are often short-lived, and we realize that making a commitment to something like a new diet may not be realistic or sustainable. Amongst these common resolutions are often financial goals like saving more or sticking to a budget. Today on TOM I want to talk about some practical ways that you can achieve these resolutions without putting too much strain on yourself. Links mentioned in this episode: http://example.com http://second-example.com

I absolutely cannot believe that we are already preparing for Thanksgiving. It feels like 2019 flew by, right? Well, I know from experience, that these last 6-weeks of the year seem to fly by at hyper-speed as well. This is indeed a great time of the year to spend time with family, rest, and reflect on the year. It’s also a great time to do some end of year tax planning. I know, I know, tax planning is not so festive, and it isn’t as fun as a turkey dinner, but the holiday season is our final opportunity to help reduce our 2019 tax bill. Who doesn’t like to pay less in taxes, right? So, with that spirit in mind, today’s TOM will be dedicated to a quick list of three potential strategies to employ before the end of the year. Links mentioned in this episode: https://thoughtsonmoney.com http://thebahnsengroup.com

Thoughts on Money Podcast is hosted by Partner, Private Wealth Advisor Trevor Cummings from The Bahnsen Group in Newport Beach, California.

Here is a very common question I get as an advisor, “Should I pay off my mortgage?” This is a difficult question to answer for two reasons: Most of the people asking have already come to their own conclusion, and they’d be hard-pressed to be convinced otherwise. They are looking for confirmation rather than insight. The answer to this question depends on the particulars of one’s situation, this is not a quick and easy, black and white, yes or no answer. Some significant discussion and financial planning needs to come first. Which makes this the perfect question to address on TOM. In today’s podcast, I’d encourage you to pay close attention to the step by step process for how we come to a conclusion. The greatest lesson from our discussion will not be the actual conclusion, but rather the thought process leading up to it. Learning to be a better “financial thinker” and how to better construct an assessment for these types of questions are the primary goals.

Trevor Cummings talks about how "risk" can work as a benefit for the savvy investor.

For a retiree, there is plenty of media out there to help instill this fear that you may outlive your savings. Talks about rising healthcare costs, fearmongering about the next financial crisis, rumors of disappearing social security, etc. etc. etc. The financial “things-to-be-afraid-of” list seems to be never-ending. It is no wonder that many surveys find a majority of retirees worried about potentially running out of money.

As a financial advisor, you get used to the fact that if you show up to a family function or a gathering with friends you are bound to get asked a handful of questions on personal finance, the markets, the economy, etc. The funny thing about these questions is that they are almost always seasonal, meaning they will revolve around the hot topic of the day.

It's not only essential to save but to look at where one saves. In this episode of the Thoughts On Money Podcast, Trevor looks at the importance of tax diversification in your retirement portfolio.

TOM is a podcast by Trevor Cummings, Partner and Wealth Advisor at The Bahnsen Group in Newport Beach, California.

The Thoughts On Money Blog posts for the Month of August 2019

In this episode of TOM, Trevor is joined by The Bahnsen Group, Founder and CIO David L. Bahnsen to discuss the last month's topics Trevor covered.

In this inaugural episode, Trevor talks about his motivation for starting TOM and offers his commentary on recent issues of the TOM Blog.